VANCOUVER, Sept. 12, 2018 /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 the holders ("Holders") of its senior secured convertible notes (the "Notes") have agreed to amend certain terms of the Notes and other concessions, including a one-year extension of the maturity of the Notes from May 17, 2019 until May 17, 2020.
"We have negotiated with the debt note-holders and, though we have little to no leverage, convinced them to give us some concessions, for which we are grateful. Most importantly, the extension of the expiration date for the convertible debt by one year will provide the Company with greater flexibility for repayment of the debt, and while no predictions can be made as to conversions, this extension may ease the pressure on the conversions," commented Fred Colen, Neovasc's President and Chief Executive Officer.
The Company has entered into a Waiver Agreement applicable to the Holders of all of the Notes, pursuant to which (1) the maturity date of the Notes is extended by one year from May 17, 2019 until May 17, 2020, (2) the Company's permitted quarterly Cash Burn (as defined in the Notes) is increased for certain future periods, (3) certain asset allowances applicable to the Company's subsidiaries are increased, and (4) issuances of the Company's common shares (the "Common Shares") that would qualify as Excluded Securities (as defined in the Notes) and not a Dilutive Issuance (as defined in the Notes) but for the fact that such issuances exceed 10% of the issued and outstanding Common Shares, will not be considered a Dilutive Issuance, provided that such Common Shares do not exceed 15% of the issued and outstanding Common Shares.
Concurrent with the Waiver Agreement, the Company entered into Lockup and Leak-Out Agreements applicable to the Holders of all of the Notes pursuant to which the Holders have agreed (1) not to sell Common Shares during the 5 consecutive trading days preceding and 15 consecutive trading days following execution of the Company's planned reverse stock split (the "Lockup"), which was announced yesterday and (2) that on any trading day from the expiration of the Lockup until November 30, 2018, they will not sell Common Shares in an amount exceeding 15% of the daily average composite trading volume of the Common Shares on such trading day (the "Leak-Out"). Both the Lockup and the Leak-Out are subject to an exception allowing Holders to sell Common Shares of the Company if such sales occur at a price equal to or in excess of the lower of (a) 150% of the Alternate Conversion Price (as defined in the Notes) and (b) US$0.0365 (or US$3.65 following the reverse stock split).
