Reva Medical (ASX:RVA) said yesterday that it’s planning a $40 million convertible note offering with several institutional and 1 undisclosed corporate investor to fund the company’s ongoing needs, including the clinical development of its Fantom sirolimus-eluting bioresorbable coronary scaffold.
Upon issuance of the convertible notes, the company is slated to receive $32.5 in net cash proceeds from committed investors. According to the deal, Reva can issue up to an additional $7.5 million of convertible notes.
The offering will close in 2 stages, according to San Diego-based Reva. The 1st closing is expected to take place in early May and Reva said it will receive net cash proceeds of $21.3 million after issuing $33.8 million of senior unsecured convertible notes and repurchasing 1.73 million shares of its common stock for $12.5 million from 1 of the participants.
Reva said it will receive up to $18.7 million in exchange for convertible notes in the 2nd closing, which is scheduled to occur no later than June 30. For the 2nd closing, investors have already committed $11.2 million.
According to the agreement, Reva will issue options for each convertible note to a maximum of 2.4 million options if the entire $52.5 million note capacity is subscribed.
“We are extremely pleased to have the support of existing and new investors who grasp the potential of the most advanced bioresorbable scaffold to treat coronary artery disease,” Reva’s CEO Reggie Groves said in prepared remarks. “Securing this commitment allows us to continue our clinical studies of Fantom for new indications, to support regulatory requirements in other countries, and to pursue development of a peripheral scaffold as our next commercial product.”
The convertible notes will have a 5-year term, Reva said, with annual interest at 8%. The noteholders can convert the notes into trading securities for $8.66 apiece, the company added.
Reva’s drug-eluting scaffold won CE Mark clearance earlier this month and the 1st Fantom sales are planned for May, according to the company.
