Nuvectra Corporation (NASDAQ:NVTR) Files An 8-K Bankruptcy or Receivership
Item 1.03
On November 12, 2019, Nuvectra Corporation (the “Company”) filed a voluntary petition (the “Bankruptcy Petition”) for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Eastern District of Texas (the “Court”). The Company intends to use this court-supervised process to continue its review of a range of options to maximize value and address its financial obligations.
The Company continues to operate its business and manage its properties as a “debtor-in-possession” under the jurisdiction of the Court and in accordance with the Bankruptcy Code and orders of the Court. The Company has filed a number of customary “first day” motions seeking Court authorization to support its operations during the court-supervised process, including a consensual cash collateral motion and a motion to pay employee wages and benefits. The Company expects to receive Court approval for these requests shortly.
The filing of the Bankruptcy Petition constituted an event of default under the Company’s Loan and Security Agreement, dated as of March 18, 2016, as amended, with Oxford Finance LLC and Silicon Valley Bank (the “Loan Agreement”), resulting in the acceleration of the Company’s obligations under the Loan Agreement. Thus, all outstanding debt under the Loan Agreement (among other obligations) is in default and accelerated, but subject to stay under the Bankruptcy Code. The outstanding principal amount of such debt is currently $10.0 million.
On November 12, 2019, the Company issued a press release announcing the filing of the Bankruptcy Petition. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
(d) Exhibits
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based only on the Company’s current beliefs, expectations and assumptions regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions, and therefore they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and may be outside of the Company’s control. The Company’s performance may differ materially from those indicated in the forward-looking statements, and you should not rely on any of these forward-looking statements. Any forward-looking statement made by the Company is based only on information currently available to the Company and speaks only as of the date on which it is made. Important factors that could cause the Company’s actual results to differ materially from those indicated in the forward-looking statements include: (i) the Company’s ability to successfully scale and continue operations during the court-supervised process; (ii) the Company’s ability to successfully sell assets or take other steps to maximize value and address its financial obligations under the court-supervised process; (iii) potential adverse effects of the court-supervised process on the Company’s liquidity and results of operations; (iv) the potential of adverse rulings in the court-supervised process, including the possibility that the Company may fail to obtain timely approval with respect to the motions it has filed or will file in the future; (v) the risk that motions filed by third parties could protract, or impede the Company’s objectives under, the court-supervised process; (vi) employee attrition and the Company’s ability to retain management and other key personnel due to distractions and uncertainties, including the Company’s ability to provide adequate compensation and benefits during the court-supervised process; (vii) the Company’s ability to maintain relationships with suppliers, customers, employees and other third parties and regulatory authorities as a result of the court-supervised process; (viii) the effects of the reorganization petitions on the Company and on the interests of its various constituents, including holders of the Company’s common stock; (ix) the detrimental effect the reorganization petitions could have on the Company’s ability to access the capital markets in the future, if desired; (x) the length of time that the Company will operate under the court-supervised process and the continued availability of operating capital during the pendency of the proceedings; (xi) increased administrative and legal costs related to the court-supervised process and other litigation and inherent risks involved in a reorganization process; (xii) the Company’s ability to successfully market its Algovita Spinal Cord Stimulation System (“Algovita”) and to develop enhancements or improvements to Algovita; (xiii) the uncertainty and timing of obtaining regulatory approvals in the United States and Europe for the Company’s Virtis sacral neuromodulation system; (xiv) the scope of protection for the Company’s intellectual property rights covering Algovita and other products using the Company’s neurostimulation technology platform, along with any product enhancements or improvements; and (xv) the Company’s compliance with all regulatory and legal requirements regarding implantable medical devices and interactions with healthcare professionals. Please see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K and in the Company’s other quarterly and periodic filings for a description of these and other risks and uncertainties. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Nuvectra Corp Exhibit
EX-99.1 2 ex_164577.htm EXHIBIT 99.1 ex_164577.htm Exhibit 99.1 FOR IMMEDIATE RELEASE Nuvectra® Continuing to Support Current Patients with the Algovita® Implant as Company Voluntarily Files for Chapter 11 Court-Supervised Process Has No Impact on Safety or Functionality of Algovita Device; Company Continuing to Support Physicians PLANO,…
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About Nuvectra Corporation (NASDAQ:NVTR)
Nuvectra Corporation is a neurostimulation company that focuses on helping physicians to improve the lives of people with chronic neurological conditions. The Company’s Algovita Spinal Cord Stimulation (SCS) System (Algovita) is the Company’s commercial offering and is Conformite Europeene (CE) marked and the United States Food and Drug Administration (FDA) approved for the treatment of chronic pain of the trunk and/or limbs. Its technology platform also has capabilities under development to support other neurological indications, such as sacral nerve stimulation (SNS) and deep brain stimulation (DBS). In addition, its NeuroNexus Technologies, Inc. (NeuroNexus) subsidiary designs, manufactures and markets neural-interface technologies for the neuroscience clinical research market. Its Virtis is an application of the Company’s neurostimulation technology platform and its first product for the SNS market. Its subsidiaries include Algostim, LLC (Algostim) and PelviStim LLC (PelviStim).
