REVA Medical arranges $52.5 million 8% five-year convertibles issuance

By Wendy Van Sickle

Columbus, Ohio, April 24 – REVA Medical, Inc. entered into an agreement with several institutional and one corporate investor under which the company will issue five-year 8% convertible notes as well as options to purchase its common stock, according to a press release.

The transaction will close in two stages. Under the first, which is expected to take place in early May, REVA will issue $33.8 million of senior unsecured convertible notes and repurchase 1,732,260 shares of its common stock for $12.5 million from one of the transaction participants.

In the second closing, the company will issue up to $18.7 million of convertibles. That closing is subject to shareholder approval and is expected to occur by June 30 at the latest. A total of $11.2 million of the second closing is currently committed.

Total net cash proceeds of $32.5 million will be received from committed investors upon issuance of the convertibles in the two closings. The company may issue up to an additional $7.5 million of convertible notes under the terms of the agreement.

Also under agreement, REVA will issue options for each convertible note issued, to a maximum 2,362,500 options if the entire $52.5 million note capacity is subscribed. Each option allows the purchase of one share of REVA’s common stock.

As part of the transaction, REVA and the continuing noteholders under its September 2014 convertible note deed have agreed to amend that 2014 note deed in order to, among other things, remove the noteholders’ option to request redemption of the notes prior to maturity, remove the automatic conversion provision of the notes, and subordinate the 2014 convertible notes to the new notes.

The new notes will allow for cash redemption by the holder at 30 month, at maturity, upon a change of control, or following an event of default. Interest will compound annually, but it will be payable only at maturity.

Noteholders will be able to convert some or all of the convertibles into the trading securities of the Company at any time at an initial conversion price of $8.655 per share of common stock.

Based on this initial conversion price, the maximum number of shares that may be issued on conversion of all the convertible notes issuable under the agreement is about 6,065,858 shares.

The conversion price is subject to adjustment.

The options have a five-year life. The initial exercise price of each option is set at $5.00, which could be adjusted upward to a maximum of $7.212 after a U.S. IPO or future financing.

Proceeds will be used to continue the company’s clinical studies of Fantom for new indications.

The medical device company is based in San Diego.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.