The Vancouver-based company said that it inked an agreement to sell Strul Medical Group a 15% original issue discount convertible note with a face value of $11.5 million, expecting to see gross proceeds of approximately $9.8 million.
In addition to the convertible debt offering, Neovasc said that it sold Strul approximately 3.3 million shares of its common stock at a price of approximately 52¢ per share, for gross proceeds of an additional approximate $1.7 million, bringing the total raised to approximately $11.5 million.
“I am very impressed with the two Neovasc medical devices, the Tiara device for the treatment of mitral valve disease and the Reducer device for minimally invasive treatment of refractory angina. We believe the clinical data is quite compelling and Fred Colen, Neovasc’s CEO, has a strong track record in the medical device space. I was impressed by the progress he has made since joining Neovasc. Our participation in the financing was compelling when you add up the quality of the products and the clinical data, the market potential for each product and the strength of the CEO willing to commit to bring these products to market,” Strul Medical Group principal Aubrey Strul said in a prepared statement.
Neovasc said that it expects the offering to close on May 17.
“Following closing of the offering, we expect our capital on hand to fund our ongoing operations well into the first quarter of 2020, which we believe provides us sufficient runway to make significant strides in our product development and commercialization efforts. We are pleased that the structure of this debt and equity private placement allows us to bring in additional capital with the least amount of dilution compared to alternative sources of capital that were considered. In addition, we believe we are bringing an investor group to the Company with a long-term view, truly interested in the advancements in treating mitral valve disease and refractory angina offered by our Tiara and Reducer devices, respectively, and supporting our efforts to make these products a success,” prez & CEO Fred Colen said in a press release.
Earlier this month, Neovasc shares took a beating after it released first-quarter results yesterday that badly missed the consensus forecast.