This debt financing and shelf registration are part of ConforMIS’ comprehensive financing strategy to optimize its capital structure and to provide the funding for driving its commercialization. Through the term loan facility with Oxford Finance, ConforMIS will initially access $15 million of debt, which is interest-only for the first two years. Additional funding of $15 million is available to the Company, at its option, through December 2017 and an additional $20 million is available through June 2018, subject to the satisfaction of certain revenue milestones. Upon funding of the second $15 million, the interest-only period will be extended to three years. The agreement has a term of five years.
“We believe that patient-specific joint replacement implants are the future of joint replacements and we are pleased to support ConforMIS as a technology leader,” said Christopher A. Herr, senior managing director at Oxford Finance. “The demonstrated clinical benefits of ConforMIS’ knee replacement systems gives us the confidence to support ConforMIS’ business model.”
“We are pleased to have the confidence and support of Oxford Finance, a specialty finance firm that provides senior debt to life sciences and healthcare services companies,” said Mark Augusti, ConforMIS’ President and CEO. “This loan facility provides the funding to support the next stage of commercialization and strengthens our ability to bring the benefits of patient-specific knee replacements to orthopedic surgeons and the patients they serve.”
Upon being declared effective by the SEC, the shelf registration statement will allow ConforMIS to sell from time to time up to $200 million of its common stock, preferred stock, debt securities, warrants, or units comprised of any combination of these securities, for its own account in one or more offerings. The shelf registration statement, once effective, is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions and ConforMIS’ future capital needs. The terms of any offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering. The Company has no immediate plans to undertake an offering under the shelf registration statement.
The shelf registration statement has been filed with the SEC but has not yet become effective. The associated securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Further, the associated securities will not be sold in any State in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.
ConforMIS currently expects that proceeds from the debt financing and any future offering under the shelf registration statement would be used for general corporate purposes, including but not limited to funding its working capital needs.