Stereotaxis ($STXS), a maker of robotic instrument navigation systems to help treat arrhythmias and coronary disease, has taken on new investors in a bid to improve its debt situation.
The St. Louis-based company said it has raised $18.5 million from "select institutional investors" in two separate transactions, and also revised its credit agreement with Silicon Valley Bank. President and CEO Michael Kaminski explained that the deal helps boost the company's financial stability as it pursues growth through products such as its Epoch robotic navigation tech.
"We have improved our financial position and are taking the necessary steps to strengthening our financial stability as we pursue our growth strategies," he said in a statement.
The deal is pretty complex, but here are the main parts: Stereotaxis will issue 21.7 million shares of common stock, plus 6-year warrants to buy another 21.7 million shares of common stock at a little more than 33 cents per share. Separately, Stereotaxis plans to raise the other $8.5 million through a private placement of unsecured, subordinated, convertible promissory debentures that mature in two years, which will also be converted into shares of common stock at a little more than 33 cents each. The debentures sale will also lead to another round of 6-year warrants that will in turn be used to purchase common stock.
Stereotaxis is using the money to rejigger its finances. The company plans to use net cash from the deal to pay off $7 million of its revolving credit facility, which will subsequently shrink from $20 million to $13 million. For 2011, the company reported $42 million in total revenue, down from $54 million the previous year due to sales softness with its Niobe robotic surgical system. Losses soared to $32 million, up from just under $20 million in net losses during 2010. At 2011 year-end, the company reported just $14 million in cash and equivalents on hand.
Stereotaxis' CFO departed after revenue plunged in the 2011 second quarter.
- here's the release