Endologix, Inc., a developer and marketer of innovative treatments for aortic disorders, announced that it has entered into a definitive agreement to raise approximately $52 million gross cash proceeds through the issuance of approximately 7.9 million new shares of the Company’s common stock at a purchase price of $6.61 per share. The Company’s net proceeds, after payment of estimated financial advisor fees but before other transaction expenses, is expected to be approximately $49 million. The primary use of this capital will be for working capital and general corporate purposes.
In a separate transaction, the Company also entered into an exchange agreement with two holders of the Company’s 3.25% Senior Convertible Notes due 2020 (the “3.25% Notes”), pursuant to which these investors exchanged an aggregate of approximately $73 million of 3.25% Notes plus accrued interest for approximately $67 million of 5.0% Convertible Senior Notes due 2024 (the “5.0% Notes”) at the rate of $900 principal amount of 5.0% Notes for every $1000 principal amount of 3.25% Notes. This agreement will replace the Company’s existing 3.25% Convertible Senior Notes due 2020 for those investors.
The Company and Deerfield also agreed to amend their existing facility agreement and credit agreement to, among other things, extend near-term mandatory amortization payments, provide for certain conversion rights and obligations pertaining to the Company’s debt to Deerfield, and provide Endologix with certain covenant relief with respect to certain of its existing revenue and global excess liquidity covenants.
“Today’s announcement represents another step forward for Endologix. The transactions announced today will allow us to focus our efforts on continued execution while investing in bringing evidence-driven products to market,” said John Onopchenko, Chief Executive Officer of Endologix, Inc. “Our supportive partners worked diligently with us to structure these transactions, and I am proud of our team’s persistence in getting this agreement finalized, ensuring that we can continue to deliver innovation to patients in need.”
Vaseem Mahboob, Chief Financial Officer of Endologix, Inc., commented, “The financing announced today will strengthen our balance sheet and provide us with a clear path to achieving operating cash flow breakeven in 2021. We are excited to continue working towards re-establishing durable, predictable growth in the markets we serve. We will remain focused on managing operating expenses while increasing commercial productivity and strategically investing in innovative therapies and related clinical studies for the treatment of AAA.”
DLA Piper and Jefferies LLC served as legal counsel and financial advisor to the Company, respectively.