Kips Bay Medical, Inc. (NASDAQ: KIPS) announced today that it has entered into a common stock purchase agreement with Aspire Capital Fund, LLC, an Illinois limited liability company, whereby Aspire Capital has committed over the next 3 years to purchase up to $20 million of Kips Bay common stock based on prevailing market prices over a period preceding each sale. Cohen & Company Capital Markets, LLC, a wholly owned subsidiary of PrinceRidge Holdings LP, acted as financial advisor to Kips Bay in connection with the transaction. “This agreement provides us the flexibility to raise equity capital at our discretion on fair and reasonable terms,” noted Manny Villafaña, Chairman and Chief Executive Officer. “This agreement will help the Company in meeting its future financing requirements and assist the Company in maintaining its focus on making progress on the regulatory and reimbursement issues that novel medical devices face in today’s environment. While we wait for the opportunity to move forward with the US regulatory process, we continue to focus our efforts on developing our international business and continue to expand our sales and marketing activities. We are continuing to spend a significant amount of time in Europe meeting with doctors and hospital administrators to expand the base of institutions implanting our eSVS MESH and to lay the foundation for the use of the eSVS MESH at still more institutions.” “Kips Bay has historically raised capital when funding is needed and at terms beneficial to our shareholders. Given the strength of our current balance sheet, we intend to continue this strategy and sell shares under this agreement at favorable times and at opportunistic prices,” said Scott Kellen, Kips Bay’s Chief Financial Officer. “We are very pleased to be working with a financial partner of the caliber and with the experience of Aspire Capital as we move forward to the next level of the development of Kips Bay.”
Key aspects of the purchase agreement include:
- Kips Bay will control the timing and amount of any sales of common stock to Aspire Capital and will know the sales price before giving notice directing Aspire Capital to purchase shares.
- Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases as the Company directs, in accordance with the purchase agreement.
- There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the purchase agreement.
- Kips Bay has issued 378,788 shares of its common stock to Aspire as a commitment fee in connection with entering into the purchase agreement.
- Kips Bay has agreed to pay Cohen & Company Capital Markets a fee of 3% of any proceeds from sales to Aspire Capital if and when any sales take place.
- The purchase agreement may be terminated by Kips Bay at any time, at its discretion, without any cost or penalty to the Company.
Safe HarborCertain statements made in this press release constitute forward-looking statements that are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. All forward-looking statements speak only as of the date of this press release and the company does not undertake any obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.