SpineGuard Establishes Standby Equity Facility

SpineGuard has established a standby equity facility (PACEO) with Société Générale, a French multinational banking and financial services company headquartered in Paris.

The move was authorized by shareholders during a March 21, 2013, meeting. SpineGuard will determine the precise timing of the funding.

“The Board of SpineGuard approved the set-up of a Standby Equity Facility,” SpineGuard CEO and co-founder Pierre Jérôme said in a news release. “With this solution, we are strengthening the capacity of our development, while limiting dilution of our shareholders. This solution secures our financial resources over time and does not reflect an immediate need of cash considering SpineGuard’s available cash and treasury of € 6.5 million as of Dec. 31, 2013.”

Under the terms of the agreement, Société Générale will purchase newly created shares at any time during the 36-month commitment period, within the global limit of 400,000 shares, being 9.3 percent of the 4,311,112 shares currently outstanding.

A draw-down of the entire standby equity facility and issuance of 400,000 new shares would reduce a stakeholder’s ownership by 0.08 percent (based on a 1 percent partnership of 4,311,112 shares), according to SpineGuard.

For each tranche, the price will equal the volume weighted average share price of the three trading days preceding the effective date of purchase with a discount capped at 8 percent, depending on the size of the drawing. This discount allows Société Générale, who is not positioned as a long-term shareholder in the company, to purchase the shares independently of market volatility.

SpineGuard has no minimum drawdown obligation, and will use the facility at its sole discretion if market conditions are favorable and in the best interests of both the company and its shareholders.

The PACEO is an equity financing solution designed by Société Générale. The PACEOhelps issues diversify their funding sources through an additional financing option while preserving the financial balances. The PACEO may be drawn at the issuer’s sole discretion through the issue of new shares at a low discount to the current market price; this solution provides the same benefits as a capital increase while providing the same guarantee as a confirmed credit line.

Founded in 2009 and based in Paris and San Francisco, Calif., SpineGuard designs, develops and markets disposable spinal devices. Its PediGuard core technology allows orthopedic spine surgeons and neurosurgeons to accurately insert pedicle screws. Equipped with a sensor at its tip and electronics in its handle, PedGuard measures changes in the electrical conductivity of surrounding tissue in real time and alerts the surgeon using audio feedback and a flashing light.

Several clinical studies have established the reliability and accuracy of PediGuard for pedicle screw placement, demonstrating significantly less radiation exposure of medical teams and shorter surgery time when it is used. The Pediguard platform is protected by eight international patent families, approved and sold in 45 countries, CE Marked in Europe, and has received 510(k) clearance from the FDA in the United States.