Baxano Surgical announced this morning a two-part financing that consists of a credit facility of up to $15 mln with Hercules Technology Growth Capital, Inc and a $7 mln stock purchase agreement with Lincoln Park Capital Fund, LLC. On the debt side, the amount will be taken down in three tranches, $7.5 mln at closing, $2.5 mln subject to a 4Q13 sales milestone ($5 mln), and the final $5 mln subject to a 1Q14 sales milestone of $7 mln and an equity raise of $15 mln (which includes the $7 mln from Lincoln Park). Interest on the credit facility will be calculated based on 7.75% plus prime (subject to a floor of 4.75%) and will mature in 38-41 months depending on revenue milestones.
On the equity side, the $7 mln stock purchase agreement with Lincoln Park is in effect over a 36 month timeframe during which Lincoln’s purchase of BAXS stock will be directed by BAXS. There is a floor under which BAXS may not sell shares to Lincoln, but no upper limit to the share price at which sales can take place.
In addition, the company continues to see quarterly upticks in comeback surgeons with 35 surgeons who hadn’t done an AxiaLIF in over a year getting involved again (23 surgeons in 2Q13 and 15 surgeons in 1Q13). Finally, results in the last quarter indicate that deal synergies are beginning to materialize.