Neovasc holders agree to extend convertibles by one year to 2020

By Marisa Wong

Morgantown, W.Va., Sept. 12 – Neovasc Inc. announced that holders of its senior secured convertible notes have agreed to an amendment to some terms of the notes, including a one-year extension of the maturity to May 17, 2020 from May 17, 2019.

“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,” president and chief executive officer Fred Colen said in a press release.

“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.”

The company said it has entered into a waiver agreement applicable to holders of all of the notes. In addition to extending the maturity date, the waiver increases the company’s permitted quarterly cash burn for some future periods and increases some asset allowances applicable to the company’s subsidiaries.

Also, issuances of the company’s common shares that would qualify as excluded securities under the notes and not a dilutive issuance, except when these issuances exceed 10% of the issued and outstanding common shares, will not be considered a dilutive issuance, provided that these shares do not exceed 15% of the issued and outstanding common shares.

Concurrently with the waiver agreement, the company entered into lockup and leak-out agreements applicable to holders of all of the notes.

The holders have agreed not to sell common shares during the five consecutive trading days preceding and 15 consecutive trading days following execution of the company’s planned reverse stock split. In addition, the holders agreed that on any trading day from the expiration of the lockup until Nov. 30, they will not sell shares in an amount exceeding 15% of the daily average composite trading volume of the stock on that trading day.

Both the lockup and the leak-out are subject to an exception allowing holders to sell common shares of the company if those sales occur at a price equal to or in excess of the lower of 150% of the alternate conversion price and $0.0365 (or $3.65 following the reverse stock split).

Neovasc is a Vancouver, B.C.-based specialty medical device company that develops, manufactures and markets products for the cardiovascular marketplace.

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