Stereotaxis secures up to $24M in convertible notes to bridge toward profitability
What's the deal? Stereotaxis, a St. Louis-based maker of surgical robotics for minimally invasive endovascular intervention, has entered agreements for a convertible note financing of up to $24 million. The deal includes a $12 million initial closing, with a further $12 million draw available at the company's option after certain regulatory milestones.
The terms: The notes carry a 10% annual interest rate, with interest due at maturity in three years. They convert into common stock at $1.21 per share — a 30% premium to the 10-day volume-weighted average price before closing.
Why now? Stereotaxis ended September with just $4 million in cash after $6.5 million of third-quarter outflow, despite revenue rising 20% year over year to $8.9 million. The initial closing lifts pro forma cash to about $16 million, with total availability of $28 million.
What's the endgame? The company says the structure "bridges the Company to profitability." Net proceeds will fund working capital, product commercialization, research and development, and general corporate purposes.
Chairman and chief executive officer David Fischel cited "the confidence and support from several of our long-term shareholders in this oversubscribed financing." He added that a "strengthened balance sheet positions us to execute our strategy and accelerate adoption of our comprehensive portfolio of innovations."
What could go wrong? The second $12 million is tied to regulatory milestones, not guaranteed. The 10% interest and premium conversion price make this a costly bridge, and the company must convert recent product progress — FDA approval and early US launch of its MAGiC catheter, plus first GenesisX sales — into sustained revenue while managing catheter supply constraints.
The signal: The financing underscores a gap that many commercial-stage medtech firms face: a maturing product pipeline that has yet to generate the cash to fund itself. For Stereotaxis, the terms signal urgency as much as confidence.
Read more: AP News
Image credit: NavyMedicine
