Amedica secured $26 million in funding for the future.
Here are five things to know about the new funding:
1. The new funds include $20 million debt financing with Hercules Technology Growth Capital. The Hercules loan agreement includes interest-only payment for 12 months with the possibility of extending the interest-only period to 18 months. Then, Amedica will repay the loan in equal monthly payments of principle and interest through Jan. 1, 2018, the scheduled maturity date. The loan is secured by a perfected first position lien on all of Amedica's assets.
2. The company also announced a private placement to MG Partners II, an affiliate of Magna, of 6 percent senior convertible notes in an aggregate principle amount of up to $6 million. The general terms of the convertible debt placement to Magna include the purchase of an initial note with a principal amount of $2.9 million for a purchase price of $2.5 million. The $400,000 in principal plus interest accrued on the initial note will be automatically extinguished upon the filing and effectiveness of a resale registration statement within certain timelines.
Additionally, Magna agreed to purchase another senior convertible note with a principle of $3.5 million. The notes are convertible into shares of the company's common stock at any time at an initial conversion price of $3.75.
3. Amedica also issued Hercules a warrant to purchase up to 516,129 shares of common stock at the excise price of $4.65 per share. Amedica issued Magna a warrant to purchase up to 568,889 shares of common stock at an excise price of $4.65 per share. Amedica's stock opened at $4.50 on July 1 with a market cap of $55.7 million.
4. Around $15.2 million of the proceeds from the financing will be used to retire Amedica's senior credit facility with General Electric Capital. "The repayment of the GE Credit Facility will eliminate approximately $3.6 million of remaining scheduled principal payments in 2014, which would have otherwise been due under the GE Credit Facility," indicated Amedica CFO Jay Moyes in a news release. "This will enable the company to now expend those resources on commercial products."
5. The remaining funds will be used for further commercialization and development of Amedica's Silicon Nitride spinal fusion products as well as the product candidates for total hip and total knee joint replacements. Finally, the funds will also be used for general corporate purposes.
In the first quarter of 2014, the company reported a total revenue increase of 10 percent and the proprietary Silicon Nitride Ceramic Product revenue increased 41 percent over the same period last year. Overall net loss for the quarter was $4.7 million due to a stock compensation expense of approximately $1.4 million recorded in the first quarter.
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