ST. LOUIS, May 7, 2012 /PRNewswire/ -- Stereotaxis, Inc. (NASDAQ: STXS) today announced it has entered into definitive agreements with select institutional investors to raise total gross proceeds of approximately $18.5 million in two financing transactions. The Company also announced an amendment to its credit agreement with Silicon Valley Bank (SVB), including extending its revolving credit facility to March 31, 2013.
In a private offering of common stock, Stereotaxis will raise $10 million through the issuance of approximately 21.7 million shares of common stock and 6-year warrants to purchase approximately 21.7 million additional shares of common stock at an exercise price of $0.3361 per share. In addition, the Company announced a private placement of approximately $8.5 million of unsecured, subordinated, convertible promissory debentures (the "Debentures") which will be convertible into shares of common stock at a price of $0.3361 per share at all times following the date the Company is required to receive shareholder approval of the transactions. In connection with the sales of the Debentures, the Company is also issuing 6-year warrants to purchase common stock equal to 100% of the shares underlying the Debentures or approximately 25.2 million shares of common stock at an exercise price of $0.3361 per share.
The Debentures bear interest at 8% per year and mature on May 7, 2014. The Company will be required to make interest payments in shares of common stock, subject to a shareholder vote to increase the number of shares authorized for issuance or a reverse stock split as well as the completion of an effective registration statement. The Company may force conversion of the Debentures under certain circumstances.
Net proceeds from these financings will be used to repay $7 million of the revolving credit facility guaranteed by Alafi Capital ("Alafi") and Sanderling Venture Partners ("Sanderling"), for working capital, and for general corporate purposes. The closing of the transactions is subject to standard and customary closing conditions.Stereotaxis expects to amend its credit agreement with Silicon Valley Bank to extend its revolving credit facility to March 31, 2013, effective upon the closing of the financing transactions. The revolving line of credit will be decreased from $20 million to $13 million after pay down of $7 million of the guaranteed portion, but otherwise has similar terms and conditions to previous agreements with Silicon Valley Bank. Sanderling and Alafi have agreed to extend their guarantees for an aggregate of $3 million of a portion of the Silicon Valley Bank revolving credit facility, in exchange for warrants to purchase up to an aggregate of 2.3 million shares of common stock each at an exercise price of $0.3361 per share, which will only become effective on the closing of the transactions and effectiveness of the Silicon Valley Bank extension. "With the support from new and existing investors, we have improved our financial position and are taking the necessary steps to strengthen our financial stability as we pursue our growth strategies," said Michael P. Kaminski, President and Chief Executive Officer of Stereotaxis. "We continue to be encouraged by the positive early feedback and validation from physicians for the productivity enhancements of our new Epoch™ robotic navigation platform, and the momentum in Niobe® ES upgrade installations. The additional financial resources, together with our strategic initiatives to ensure successful commercialization of our Epoch platform as well as ongoing operating expense reduction initiatives, position us for improved operating performance and financial results beginning in 2012." Oppenheimer & Co. Inc. served as sole placement agent for each of the financing transactions.