Apollo Endosurgery Extends Maturity Date on Senior Secured Term Loan and Convertible Notes

Rhea-AI Summary

Apollo Endosurgery (NASDAQ:APEN) announced an agreement to extend the interest-only period and maturity date of its term loan with Solar Capital Ltd. This extension, effective December 4, 2020, defers principal payments by 12 months, improving liquidity by approximately $12 million in 2021. Additionally, 99.25% of the company’s 6% convertible notes have been extended until August 12, 2026. CFO Stefanie Cavanaugh stated the extension strengthens liquidity and reduces the need for new equity financing before achieving positive cash flow.

Positive

• Liquidity improvement of approximately $12 million in 2021 through the deferral of principal payments.
• Extension of maturity date for the term loan until September 1, 2024, and convertible notes until August 12, 2026, providing more time to execute business plans.

Negative

• None.

AUSTIN, TX / ACCESSWIRE / December 7, 2020 / Apollo Endosurgery, Inc. ("Apollo") (NASDAQ:APEN), a global leader in less invasive medical devices for gastrointestinal and bariatric procedures, today announced an agreement with Solar Capital Ltd. to extend the interest only period and maturity date of its existing term loan. In addition, the Company and holders of 99.25% of the outstanding principal amount of its 6% convertible notes due 2024 have also agreed to an extension of the maturity date on those notes.

Under the Solar amendment, which became effective on December 4, 2020, both the interest only period and maturity date of the term loan is extended for 12 months. The interest only period is extended from March 2021 to March 2022 and the maturity date is extended from September 1, 2023 to September 1, 2024. In addition, the amendment will automatically further extend the interest only period and maturity date by an additional six-months if a specific revenue milestone is achieved as of December 31, 2021. The extension of the interest only period improves the Company's 2021 liquidity by approximately $12 million by deferring principal payments that were otherwise scheduled to begin in March of 2021.

As a result of the extension, Solar will receive incremental final and exit fees due at the end of the loan and prepayment fees were reset as of the effective date of the extension. Interest and minimum liquidity requirements are unchanged after the extension.

The convertible notes amendment extends the maturity date for 99.25% of the outstanding principal amount of the Company's 6% convertible notes from August 12, 2024 to August 12, 2026. No other terms of the convertible notes were affected by the amendment.

"The Solar extension announced today substantially strengthens our liquidity as we continue to execute plans to reach the goal of generating positive cash flow from operations and reduces the risk that we might require additional equity financing prior to attaining that goal," said Stefanie Cavanaugh, Chief Financial Officer.

About Apollo Endosurgery, Inc.
Apollo Endosurgery, Inc. is a medical technology company focused on less invasive therapies to treat various gastrointestinal conditions, ranging from gastrointestinal defect repairs to the interventional treatment of obesity. Apollo's device-based therapies are an alternative to invasive surgical procedures, thus lowering complication rates and reducing total healthcare costs. Apollo's products are offered in over 75 countries today and include the OverStitch™ Endoscopic Suturing System, the OverStitch Sx™ Endoscopic Suturing System, and the ORBERA® Intragastric Balloon.

Apollo's common stock is traded on NASDAQ Global Market under the symbol "APEN". For more information regarding Apollo Endosurgery, go to: www.apolloendo.com.

Cautionary Note on Forward-Looking Statements
Certain statements in this press release are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it may have on the Company's operations, the demand for the Company's products, the Company's liquidity position, global supply chains and economic activity in general. Important factors that could cause actual results to differ materially include: the advancement of Apollo products; development of enhancements to Apollo's existing products and technologies; market acceptance of Apollo's products; the execution of our gross margin improvement projects; the ability to collect future payments from ReShape; statements relating to the availability of cash for Apollo's future operations and debt service obligations; statements relating to the potential need for future equity financing; and Apollo's ability to support the adoption of its products and broaden its product portfolio as well as other factors detailed in Apollo's periodic reports filed with the Securities and Exchange Commission, or SEC, including its Form 10-K for the year ended December 31, 2019 and its Form 10-Q for the period ending September 30, 2020. Copies of reports filed with the SEC are posted on Apollo's website and are available from Apollo without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, Apollo disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Disclosure Information
Apollo uses the investor relations section of its website as a means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors should monitor Apollo's investor relations website in addition to following Apollo's press releases, SEC filings, and public conference calls and webcasts.

Contact:
Apollo Endosurgery, Inc.
Stefanie Cavanaugh, 512-279-5100
investor-relations@apolloendo.com

Darrow Associates Investor Relations
Matt Kreps, 214-597-8200
mkreps@darrowir.com

SOURCE: Apollo Endosurgery, Inc.

View source version on accesswire.com:
https://www.accesswire.com/619611/Apollo-Endosurgery-Extends-Maturity-Date-on-Senior-Secured-Term-Loan-and-Convertible-Notes

FAQ

What recent agreement has Apollo Endosurgery made regarding their term loan?

Apollo Endosurgery has extended the interest-only period and maturity date of its term loan with Solar Capital Ltd., effective December 4, 2020.

How much liquidity improvement does Apollo expect from this agreement?

The agreement is expected to improve Apollo's liquidity by approximately $12 million in 2021.

When is the new maturity date for Apollo's convertible notes?

The maturity date for 99.25% of Apollo's 6% convertible notes has been extended to August 12, 2026.

What impact does the loan extension have on Apollo's financial strategy?

The loan extension strengthens Apollo's liquidity and reduces the risk of requiring additional equity financing before achieving positive cash flow.