WALTHAM, Mass.--(BUSINESS WIRE)--Corindus Vascular Robotics, Inc. (NYSE American: CVRS), a leading developer of precision vascular robotics, announced today that it has entered into definitive agreements to issue newly-designated Series A Convertible Preferred Stock to a select group of existing investors including Hudson Executive Capital and BioStar Ventures, and new investors, for gross proceeds of $25 million before deducting offering expenses. Under the terms of the transaction, the Company will issue shares of Series A Convertible Preferred Stock convertible into 20,000,000 shares of its Common Stock at a rate of $1.25 per share. The Company is also issuing to the investors warrants to purchase an aggregate of 8,750,000 shares of the Company’s Common Stock at an exercise price of $1.40 per share. The transaction is expected to close on or about March 16, 2018, and is subject to customary closing conditions. The closing price per share of the Company’s Common Stock on the NYSE American on March 15, 2018 was $1.29 per share.
Shares of the Company’s Series A Convertible Preferred Stock will be entitled to receive non-compounding dividends in additional shares of preferred stock, at the rate of 12% per annum, subject to reduction in the event certain milestones are achieved.
The net proceeds are expected to be approximately $24.5 million. Corindus intends to use the proceeds of the offering for general corporate purposes including global commercialization of its CorPath GRX System. The CorPath System is the first and only FDA-cleared medical device to bring robotic precision to both percutaneous coronary and percutaneous vascular procedures. The Company believes this offering will enable it to fund ongoing growth and will enhance the Company’s ability to optimize the potential of its new products and capabilities.
Holders of approximately 38% of the Company’s outstanding Common Stock have entered into irrevocable agreements to vote their shares in connection with the transactions to allow the potential full conversion of all dividends in additional shares of stock, which we expect to occur at the 2018 Annual Stockholder Meeting.
Following the consummation of the private placement, the Company intends to enter into a term loan and revolving line of credit agreement with Silicon Valley Bank and Solar Capital Ltd., providing access to a new four-year term loan for up to $23 million, with $12 million funded at closing and remainder available upon attainment of milestones, as well as a revolving line of credit for up to $3 million. The closing of the term loan and revolving line of credit will be conditioned upon the closing of the private placement.
In connection with the transaction, Douglas Braunstein has been appointed to the Company’s Board of Directors, effective as of the closing of the private placement. Mr. Braunstein is a seasoned investor and veteran advisor to public companies. Since 2015, Mr. Braunstein has served as the managing partner and founder of Hudson Executive Capital. Previously, Mr. Braunstein served in various roles at JPMorgan Chase & Co., including as vice chairman and chief financial officer.
“We are very pleased with this transaction and to have these leading firms invest in Corindus,” said Mark Toland, Corindus President and CEO. “The guidance and leadership from Doug’s addition to our board of directors will bring significant value to Corindus as we continue to ramp up our commercial efforts with CorPath GRX.”
About Corindus Vascular Robotics, Inc.
Corindus Vascular Robotics, Inc. is a global technology leader in robotic-assisted vascular interventions. The Company's CorPath® System is the first FDA-cleared medical device to bring robotic precision to both percutaneous coronary and percutaneous vascular procedures. The CorPath GRX System builds on the CorPath platform with the addition of important key features that increase precision, improve workflow, and extend the capabilities and range of procedures that can be performed robotically. In addition, CorPath protects physicians and staff from the occupational hazards of working with radiation exposure in the cath lab. With the CorPath platform, Corindus brings robotic precision to interventional procedures to optimize clinical outcomes and minimize the costs associated with complications of improper stent placement during manual procedures. For additional information, visit www.corindus.com, and follow @CorindusInc.
