Amedica enters debt exchange agreement

Amedica Corporation announced it has entered into a debt exchange agreement with Riverside Merchant partners LLC, Hercules Technology III L.P. and Hercules Capital Inc.

According to a press release, Amedica agreed to exchange $1 million of the outstanding principal amount under the term loan held by Riverside for a subordinated convertible promissory note of $1 million with a warrant to purchase 100,000 shares of common stock. The promissory note can be converted into shares of common stock at a fixed conversion price of $1.43. The exercise price of the warrant is set at $1.62 per share. The interest rate on the note is 6% per annum and is due on March 3, 2018.

“The favorable terms of this agreement allow Amedica to better position itself to refinance the balance of its outstanding debt,” B. Sonny Bal, MD, MBA, chairman and chief executive officer, said in the release. “Upon Riverside’s anticipated conversion of the convertible promissory note, the reduction of our total debt level with modest fixed warrant coverage will provide confidence to our investors, while unlocking additional working capital. Restructuring our debt makes sense in light of the several promising near- and intermediate-term milestones for Amedica that will enhance shareholder value.”

Prior to June 1, 2016 or if certain conditions are met by the companies, at Amedica’s option on May 3, 2016, Amedica and Riverside can exchange another $2 million of the principal amount of the Hercules term loan for another subordinated convertible promissory note of $2 million with a fixed conversion price of $1.43 and a warrant to purchase another 100,000 shares of common stock, according to the release.

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