Outset Medical, Inc. (OM), a California-based medical technology company, Monday announced it has signed an agreement for a private placement of 843,908 shares of its Series A Non-Voting Convertible Preferred Stock, priced at $200.00 per share.
Each Series A Preferred Share will automatically convert into 250 shares of common stock, totaling 210,977,000 shares of common stock.
Outset expects to raise $168.8 million from the private placement before deducting fees and other costs. Additionally, some board members and company leaders, including Chair and CEO Leslie Trigg, plan to invest $3.9 million for 19,432 shares of Series A Non-Voting Convertible Preferred Stock, upon shareholders' approval.
Additionally, OM has signed a credit agreement and guarantee with a fund managed by Perceptive Advisors. This agreement will provide a $100 million 5-year loan at closing, plus an optional loan of up to $25 million, available only if the company meets a specific revenue target.
The company has secured loans with an interest rate tied to a short-term rate, plus 8%, and maturing in 2030. These loans will be backed by most of the company's assets. The company plans to use the funds from the loans, along with its available cash, to fully pay off its existing debt due in 2027.
After closing the financing and repaying its debt, the company expects to have about $210 million in cash and investments, with $100 million in debt remaining.
Currently, OM is trading at $1.31 or 6.43% lower on the Nasdaq Global Select Market.
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