Neovasc Inc. (TSX/NASDAQ: NVCN) has completed its previously announced offering of 6,609,588 Series A units and 19,066,780 Series B units at US $1.46 per unit for gross proceeds US $37,487,497 and concurrent private placement of US $32.75 million aggregate principal amount of senior secured convertible notes and Series E warrants for gross proceeds of US $27,837,500.
Canaccord Genuity Inc. acted as the sole book-running manager for the public offering and as the sole placement agent for the concurrent private placement.
Blake, Cassels & Graydon LLP acted as Neovasc’s Canadian legal counsel to Neovasc and Skadden, Arps, Slate, Meagher & Flom LLP, and Wilson Sonsini Goodrich & Rosati acted as US legal counsel. Stikeman Elliott LLP and Goodwin Procter LLP acted as Canadian and US legal counsels to the underwriter respectively.
Bio IP Ventures II LLC acted as collateral agent for the benefit of the noteholders over all of Neovasc’ present and after-acquired personal property, which includes all of its assets in the U.S., Canada and Israel related to Tiara and Reducer.
Upon closing of the financing, Bio IP Ventures will hold 10,355,108 common shares and 3,573,830 common shares represented by prefunded Series D Warrants, 0 Series A Units, 13,928,938 Series B Units, US $23,925,000 aggregate principal amount of Notes, and 16,386,986 Series E Warrants. Bio IP would own 107,668,071 common shares, representing approximately 136.4% of Neovasc’s current issued and outstanding number of common shares on partially diluted basis.
Boston Scientific Corp. (NYSE: BSX) will hold 11,817,000 common shares, representing 11.3% of the post-closing issued and outstanding common shares and no Series A Units, Series B Units, Notes, and Series E Warrants.
Frost Gamma Investments Trust, an insider of Neovasc, currently holds 15,051,164 common shares representing 19.1% of the currently issued and outstanding common shares. After giving effect to the transaction, Frost will hold 16,421,027 common shares (representing approximately 15.7% of the post-closing issued and outstanding common shares), 1,369,863 Series A Units, 0 Series B Units, US $0 aggregate principal amount of Notes, and 0 Series E Warrants. Pursuant to the transaction, assuming full conversion of all warrants and note held by Frost, the maximum number of common shares issuable to Frost will be 5,753,973 common shares, representing approximately 7.3% of Neovasc’s current issued and outstanding number of common shares.
Neovasc intends to use the net proceeds to fully fund the approximately US $42 million balance of the damages and interest awards granted in the litigation with CardiAQ (after subtracting the US $70 million that Neovasc has paid from escrow to CardiAQ), with remaining funds being used (i) to partially fund the ongoing Tiara clinical program; (ii) to support the completion of the TIARA-II study; and (iii) for general corporate purposes.
Richmond, BC based Neovasc is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer™, for the treatment of refractory angina which is not currently available in the United States and has been available in Europe since 2015 and the Tiara™, for the transcatheter treatment of mitral valve disease, which is currently under investigation in the United States, Canada and Europe. The Company also sells a line of advanced biological tissue products that are used as key components in third-party medical products including transcatheter heart valves.
photo credit: Neovasc