Apollo Endosurgery Announces New $ 100 Million Secured Term Loan Facility from Innovatus Capital Partners, LLC

  • $ 35 million closely funded to refinance existing debt, extend maturity and reduce interest expense

  • Additional borrowing capacity provides minimum dilution growth capital and strategic flexibility

AUSTIN, TX / ACCESSWIRE / December 21, 2021 / Apollo Endosurgery, Inc. (“Apollo”) (NASDAQ: APEN), a global leader in less invasive medical devices for gastrointestinal and bariatric procedures, today announced that it has entered into a debt financing agreement with a subsidiary of ‘Innovatus Capital Partners, LLC (“Innovatus”) to provide Apollo with term loan financing of up to $ 100 million.

“We are delighted to partner with a long-term strategic investor such as Innovatus in this transaction,” said Chas McKhann, President and CEO. “This new loan facility gives us the flexibility to invest in our business and fund our growth initiatives through minimum dilution financing. Importantly, with this source of additional capital, our leadership team can focus on creating value in our business through continuous execution.

The new term loan lowers Apollo’s cost of capital, extends amortization by an additional 33 months over the previous term loan, and lowers debt service cash requirements by nearly $ 30 million over the years. next three years.

“Innovatus is delighted to be working with Apollo and its management team,” said Claes Ekstrom, Managing Director. “We believe this transaction enables Apollo to accelerate the adoption of its portfolio of highly differentiated products for a wide range of patient needs.

On December 21, 2021, Apollo entered into a loan and guarantee agreement (the “Loan Agreement”) under which Innovatus agreed to provide certain term loans with an aggregate principal amount of up to $ 100 million. dollars, with the first tranche of $ 35 million (Term A Tranche) to be funded at closing and used to repay Apollo’s existing term credit facility with SLR Capital Partners.

Apollo will be eligible to draw on additional tranches starting June 30, 2022 as follows:

  • Term B of $ 15 million between July 1, 2023 and December 31, 2023, upon reaching certain revenue milestones;

  • Term C of $ 25 million between July 1, 2024 and December 31, 2024, upon reaching certain revenue milestones; and

  • Term D Up to $ 25 million per second between June 30, 2022 and June 30, 2024, for the purpose of funding all or part of any approved acquisition.

Borrowings under the Loan Agreement will bear interest at the greater of the Wall Street Journal prime rate or 3.25%, plus 4.0% (currently 7.25%). Apollo has the right to make interest payments only for 60 months, followed by monthly payments of principal and interest until maturity on the sixth anniversary of the original funding date.

The loan agreement is secured by substantially all of Apollo’s assets.

Prior to December 21, 2025, Innovatus will have the right, but not the obligation, to make a one-time election to convert up to 10% of the total principal amount outstanding from the term loans into common shares of Apollo. These shares will be issued at a price per share equal to $ 11.50.

Credo 180 acted as Apollo’s sole financial advisor on this transaction.

Additional details regarding the funding will be included in a current report on Form 8-K, which Apollo will file with the Securities and Exchange Commission within four business days of the date of this press release.

About Apollo Endosurgery, Inc.
Apollo Endosurgery, Inc. is a medical technology company focused on the development of next-generation, less invasive devices to advance therapeutic endoscopy, designed to treat a variety of gastrointestinal conditions, including closure of gastrointestinal abnormalities, management gastrointestinal complications and treatment of obesity. Apollo’s device-based therapies are an alternative to invasive surgical procedures, reducing complication rates and overall healthcare costs. Apollo products are now available in more than 75 countries and include the OverStitch® Endoscopic Suture System, OverStitch Sx® Endoscopic Suture System, HeliX X-Tack® Endoscopic Fixation System and ORBERA® Intragastric Balloon .

Apollo’s common stock is traded on the Nasdaq Global Market under the symbol “APEN”. For more information on Apollo Endosurgery, visit: http://www.apolloendo.com/.

About Innovatus Capital Partners, LLC
Innovatus Capital Partners, LLC, is an independent advisor and portfolio management company with approximately $ 1.5 billion in assets under management. Innovatus adheres to an investment strategy that identifies disruptive and growth opportunities across multiple asset classes with a unifying theme of capital preservation, income generation and upside option. The company has a dedicated team of life science investment professionals with extensive experience in healthcare, including life sciences. Innovatus and its executives have significant experience in debt financing of medical device, diagnostics and biotechnology companies that address unmet medical needs, improve patient outcomes, and reduce overall healthcare spending. More information is available at www.innovatuscp.com.

Caution regarding forward-looking statements
Certain statements contained in this press release, such as the future market adoption of Apollo’s products and Apollo’s ability to execute growth initiatives, are forward-looking statements subject to risks and uncertainties that may lead to results that differ significantly from expectations. In addition, there is uncertainty regarding the spread of the COVID-19 virus and the impact it could have on Apollo’s operations, Apollo’s financial outlook for future periods, the demand for Apollo’s products. , Apollo’s liquidity position, global supply chains and general economic activity. . Important factors that could cause actual results to differ materially include: reports of adverse events related to our products, results of clinical studies related to our products, development of competing medical products by competitors, regulatory approvals and extensive regulatory oversight by the FDA or other regulatory agencies. authorities, adverse media coverage related to our products or related proceedings, coverage and reimbursement decisions by private or government payers, Apollo’s ability to support adoption of its products and expand its product portfolio; the potential size of Apollo’s addressable markets; execution of our gross margin improvement projects; and the availability of liquidity for Apollo’s future operations as well as other factors detailed in Apollo’s periodic reports filed with the Securities and Exchange Commission, or SEC, including its annual report on Form 10-K for the Year ended December 31, 2020 and its Quarterly Report Report on Form 10-Q for the quarterly period ended September 30, 2021. Copies of reports filed with the SEC are posted on the Apollo website and are available free of charge from of Apollo. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, Apollo disclaims any obligation to update these forward-looking statements to reflect events or developments. future circumstances.

Disclosure Information
Apollo uses the Investor Relations section of its website as a means of complying with its disclosure obligations under the FD Regulation. Accordingly, we recommend that investors monitor the Apollo Investor Relations website in addition to following Apollo press releases, SEC filings, public conference calls and webcasts.

Apollo Endosurgery, Inc.
investor- relations@apolloendo.com

Darrow Associates Investor Relations
Matt Kreps, 214-597-8200

THE SOURCE: Apollo Endosurgery, Inc.

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