The Palo Alto-based company makes the AeroForm tissue expander for post-mastectomy breast reconstruction. The device is designed to expand and stretch the skin and underlying muscle prior to a permanent breast implant using small amounts of CO2 up to 3 times a day.
“We are delighted to be working with a partner like Oxford,” president & CEO Scott Dodson said in prepared remarks. “Under our current plans, this minimally dilutive debt financing positions us strongly with the working capital we need for our full US sales and marketing efforts and to drive our business expansion throughout the foreseeable future.”
“We are pleased to partner with the AirXpanders’ team,” added Oxford senior managing director Christopher Herr. “We are delighted by AeroForm’s successful launch in the U.S. market and to provide capital at this exciting juncture for the company.”
The terms of the 59-month loan call for AirXpanders to pay interest-only deposits for 24 months; another year of interest-only payments is on the table if the company meets revenue and other milestones. Interest on the variable-rate note is the greater of the 30-day London Interbank Offered Rate (currently 8.48%, according to the company) or 8.25%. Oxford has the right of first refusal on a potential $5 million accounts-receivable-based line of credit with a third-party lender through the end of next year, AirXpanders said.
The company also said it issued roughly $450,000 worth of warrants priced at the lower of the 10-day closing price on its CHESS depository interests or the closing price on the day prior to the transaction.
AXP shares gained 3.3% Down Under today to close at 62.7¢ (A79¢).
($1 = A$1.26018)