ViewRay gets approval of heavily amended $18 million DIP package

By Sarah Lizee

Olympia, Wash., Aug. 30 – ViewRay, Inc. received final court approval of an amended $18 million debtor-in-possession financing package, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The company was seeking approval of a $9 million new-money facility via MidCap Financial Services, LLC, but the motion for approval of the financing drew an objection from the official committee of unsecured creditors. The facility was set to include an $18 million rollup of prepetition debt.

At an Aug. 21 hearing, the court sustained the committee’s objection in part, and the court gave the parties guidance regarding the relief it would be prepared to approve.

After that, the debtors, lenders and committee discussed potential revisions to the financing.

ViewRay said that during this time, there was also a substantial improvement in its near-term liquidity outlook, due to a customer coming forward and offering to accelerate payment terms for delivery of a MRIdian system.

The following key changes were made to the financing following the negotiations:

• A milestone was removed that would have required the debtors to have a fully executed stalking horse asset purchase agreement by Aug. 25 in order to avoid an event of default;

• The total amount of new money under the DIP facility is now $6 million, down from $9 million, which reduces the total potential rollup among to $12 million from $18 million;

• The amount of the initial borrowing was reduced to $2 million from $1 million;

• A condition was removed that required the company to have an executed asset purchase agreement prior to the initial borrowing; and

• Testing for compliance with the DIP budget will now occur every two weeks instead of every four weeks.

The facility is set to mature on Oct. 5 and bear interest at 15% per annum, or 17% per annum following a default.

There is a 3% commitment fee and a 4% exit fee.

Denver-based ViewRay designs, manufactures and markets MRIdian, a magnetic resonance image-guided radiation therapy system to simultaneously image and treat cancer patients. The company filed Chapter 11 bankruptcy on July 16 under case number 23-10935.

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