Upon closing of this agreement, cash and cash
equivalents is expected to support operations into Q1 2020
NASDAQ, TSX: NVCN
VANCOUVER, May 14, 2019 /CNW/ - Neovasc Inc. ("Neovasc"
or the "Company") (NASDAQ: NVCN)(TSX: NVCN), a leader in the
development of minimally invasive transcatheter mitral valve
replacement technologies and in the development of minimally
invasive devices for the treatment of refractory angina, announced
today that it has entered into an agreement to sell to Strul
Medical Group LLC ("SMG") (i) a 15% original issue discount
convertible debenture (the "Debenture") with a face value of
US$11.5 million, for gross proceeds
to the Company of US$9,775,000, and
(ii) 3,349,514 common shares of the Company ("Common Shares") at a
price of US$0.515 per Common Share,
for gross proceeds to the Company of US$1,725,000 (collectively, the "Offering").
The Debenture will mature four years from the date of its
issuance. Interest on the face value of the Debenture will be 8%
for the first year and 10% for the following three years, with 3%
of the total interest accruing each year and becoming payable at
the end of the term of the Debenture. Cash interest in the
first year will be paid on May 17,
2020 and thereafter will be paid biannually. The Debenture
will be convertible at the option of SMG at a conversion price of
US$0.75 per Common Share for the
first two years, US$0.85 per Common
Share for the third year and US$0.97
per Common Share for the last year of the term of the
Debenture.
"I am very impressed with the two Neovasc medical devices, the
Tiara device for the treatment of mitral valve disease and the
Reducer device for minimally invasive treatment of Refractory
Angina," said Aubrey Strul, a
Principal of SMG. "We believe the clinical data is quite
compelling and Fred Colen, Neovasc's
CEO, has a strong track record in the medical device space. I was
impressed by the progress he has made since joining Neovasc. Our
participation in the financing was compelling when you add up the
quality of the products and the clinical data, the market potential
for each product and the strength of the CEO willing to commit to
bring these products to market."
"Following closing of the Offering, we expect our capital on
hand to fund our ongoing operations well into the first quarter of
2020, which we believe provides us sufficient runway to make
significant strides in our product development and
commercialization efforts," stated Fred
Colen, President and Chief Executive Officer of Neovasc. "We
are pleased that the structure of this debt and equity private
placement allows us to bring in additional capital with the least
amount of dilution compared to alternative sources of capital that
were considered. In addition, we believe we are bringing an
investor group to the Company with a long-term view, truly
interested in the advancements in treating mitral valve disease and
refractory angina offered by our Tiara and Reducer devices,
respectively, and supporting our efforts to make these products a
success."
It is anticipated that the Offering will close on or about
May 17, 2019. The Offering is subject
to the receipt of all necessary regulatory approvals, including the
approval of the Toronto Stock Exchange, and other customary closing
conditions.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any securities and shall not constitute an
offer, solicitation, or sale in any jurisdiction in which such
offer, solicitation, or sale is unlawful. The securities have not
been and will not be registered under the Securities Act of 1933,
as amended, and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
About Neovasc Inc.
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™ (the "Reducer"), for the treatment of
refractory angina, which is not currently commercially available in
the United States and has been
commercially available in Europe
since 2015, and the Tiara™, for the transcatheter treatment of
mitral valve disease, which is currently under clinical
investigation in the United
States, Canada and
Europe. For more information,
visit: www.neovasc.com.
Certain statements in this news release contain forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 and applicable Canadian securities
laws that may not be based on historical fact, including
without limitation statements containing the words "believe",
"may", "plan", "will", "estimate", "continue", "anticipate",
"intend", "expect" and similar expressions. Forward-looking
statements may involve, but are not limited to, comments with
respect to the terms of the Debenture and Common Shares, the
intended use of proceeds of the Offering, expectations that
proceeds from the Offering will fund the Company's ongoing
operations well into the first quarter of 2020, expectations that
the Company will make significant strides in its product
development and commercialization efforts, the market potential for
the Reducer and the Tiara, SMG's long term view in investing in the
Company, potential success of the Company's products and
advancement of treatment of mitral valve disease and refractory
angina, and the growing cardiovascular marketplace. Many factors
and assumptions could cause the Company's actual results,
performance or achievements to differ materially from those
expressed or implied by the forward-looking statements, including,
without limitation, the substantial doubt about the Company's
ability to continue as a going concern; risks relating to the
senior secured convertible notes (the "Notes") issued pursuant to
the November 2017 private placement
(the "2017 Financing"), resulting in significant dilution to the
Company's shareholders; risks relating to the Company's need for
significant additional future capital and the Company's ability to
raise additional funding; risks relating to cashless exercise and
adjustment provisions in the Notes issued pursuant to the 2017
Financing, which could make it more difficult and expensive for the
Company to raise additional capital in the future and result in
further dilution to investors; risks relating to the sale of a
significant number of common shares of the Company; risks relating
to the conversion of Notes issued pursuant to the 2017 Financing,
which may encourage short sales by third parties; risks relating to
the possibility that the common shares of the Company may be
delisted from the Nasdaq Capital Market or the Toronto Stock
Exchange, which could affect their market price and liquidity;
risks relating to the Company's conclusion that it did not have
effective internal control over financial reporting as at
December 31, 2018; risks relating to
the Company's common share price being volatile; risks relating to
the influence of significant shareholders of the Company over the
Company's business operations and share price; risks relating to
the Company's significant indebtedness, and its effect on the
Company's financial condition; risks relating to claims by third
parties alleging infringement of their intellectual property
rights; risks relating to lawsuits that the Company is subject to,
which could divert the Company's resources and result in the
payment of significant damages and other remedies; the Company's
ability to establish, maintain and defend intellectual property
rights in the Company's products; risks relating to results from
clinical trials of the Company's products, which may be unfavorable
or perceived as unfavorable; the Company's history of losses and
significant accumulated deficit; risks associated with product
liability claims, insurance and recalls; risks relating to use of
the Company's products in unapproved circumstances, which could
expose the Company to liabilities; risks relating to competition in
the medical device industry, including the risk that one or more of
the Company's competitors may develop more effective or more
affordable products; risks relating to the Company's ability to
achieve or maintain expected levels of market acceptance for the
Company's products, as well as the Company's ability to
successfully build its in-house sales capabilities or secure
third-party marketing or distribution partners; the Company's
ability to convince public payors and hospitals to include the
Company's products on their approved products lists; risks relating
to new legislation, new regulatory requirements and the efforts of
governmental and third-party payors to contain or reduce the costs
of healthcare; risks relating to increased regulation, enforcement
and inspections of participants in the medical device industry,
including frequent government investigations into marketing and
other business practices; risks associated with the extensive
regulation of the Company's products and trials by governmental
authorities, as well as the cost and time delays associated
therewith; risks associated with post-market regulation of the
Company's products; health and safety risks associated with the
Company's products and industry; risks associated with the
Company's manufacturing operations, including the regulation of the
Company's manufacturing processes by governmental authorities and
the availability of two critical components of the Reducer; risk of
animal disease associated with the use of the Company's products;
risks relating to the manufacturing capacity of third-party
manufacturers for the Company's products, including risks of supply
interruptions impacting the Company's ability to manufacture its
own products; risks relating to the Company's dependence on limited
products for substantially all of the Company's current revenues;
risks relating to the Company's exposure to adverse movements in
foreign currency exchange rates; risks relating to the possibility
that the Company could lose its foreign private issuer status under
U.S. federal securities laws; risks relating to breaches of
anti-bribery laws by the Company's employees or agents; risks
associated with future changes in financial accounting standards
and new accounting pronouncements; risks relating to the Company's
dependence upon key personnel to achieve its business objectives;
the Company's ability to maintain strong relationships with
physicians; risks relating to the sufficiency of the Company's
management systems and resources in periods of significant growth;
risks associated with consolidation in the health care industry,
including the downward pressure on product pricing and the growing
need to be selected by larger customers in order to make sales to
their members or participants; risks relating to the Company's
ability to successfully identify and complete corporate
transactions on favorable terms or achieve anticipated synergies
relating to any acquisitions or alliances; risks relating to the
Company's ability to successfully enter into fundamental
transactions as defined in the Notes issued pursuant to the 2017
Financings; anti-takeover provisions in the Company's constating
documents which could discourage a third party from making a
takeover bid beneficial to the Company's shareholders; and risks
relating to conflicts of interests among the Company's officers and
directors as a result of their involvement with other issuers.
These risk factors and others relating to the Company are discussed
in greater detail in the "Risk Factors" section of the Company's
Annual Report on Form 20-F and in the Management's Discussion and
Analysis for the three months ended March
31, 2019 (copies of which may be obtained at www.sedar.com
or www.sec.gov). The Company has no intention and undertakes no
obligation to update or revise any forward-looking statements
beyond required periodic filings with securities regulators,
whether as a result of new information, future events or otherwise,
except as required by law.
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SOURCE Neovasc Inc.