Alphatec Holdings Announces $18.9 Million Private Placement

March 23, 2017 | Editor

Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a provider of spinal fusion technologies, announced  that it has entered into a definitive securities purchase agreement to raise approximately $18.9 million in a private placement of common stock, Series A Convertible Preferred Stock and warrants exercisable for common stock. The private placement is being led by new healthcare dedicated institutional investors, with participation by directors and executive officers of Alphatec and other existing investors. The private placement is expected to close on or about March 28, 2017, subject to the satisfaction of customary closing conditions. Alphatec expects to use the net proceeds from the private placement for general corporate and working capital purposes.

“We appreciate the support of our new and existing investors and the confidence this conveys in our strategy to build a high-growth spine company,” said Terry Rich, Alphatec Spine’s Chief Executive Officer.  “We believe the additional capital will allow us to execute on our plans to expand our surgeon customer base, drive growth through the launch of our new products—Arsenal Deformity™, Battalion™ Lateral and XYcor® Expandable Interbody—as well as support the transformation of our distribution channel.”

H.C. Wainwright & Co., LLC, is acting as the exclusive placement agent in connection with this private placement.

Pursuant to the terms of the securities purchase agreement, Alphatec has agreed to sell 1,809,628 shares of common stock at a price of $2.00 per share.  In addition, Alphatec has agreed to sell approximately 15,245 shares of newly created Series A Convertible Preferred Stock, which shares of preferred stock are convertible into approximately 7,622,372 shares of common stock, subject to limitations on conversion until the approval by Alphatec’s stockholders as required in accordance with the NASDAQ Global Select Market rules. Purchasers will also receive warrants to purchase up to approximately 9,432,000 shares of common stock at an exercise price of $2.00 per share. The warrants will be exercisable following approval by Alphatec stockholders, and will expire 5 years from the date of such stockholder approval.

Certain directors and executive officers of Alphatec agreed to purchase an aggregate of $2.35 million of shares of Series A Convertible Preferred Stock, which shares are convertible into approximately 1,175,000 shares of common stock, and warrants to purchase up to 1,175,000 shares of common stock at a price of $2.00 per share.

The securities to be sold in the private placement will not have been registered under the Securities Act of 1933, as amended, or state securities laws as of the time of issuance and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements. Alphatec has agreed to file one or more registration statements with the SEC registering the resale of the shares of common stock purchased in the private placement and the shares of common stock underlying the warrants and issuable upon conversion of the Series A Convertible Preferred Stock.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful.

About Alphatec Spine

Alphatec Spine, Inc., a wholly owned subsidiary of Alphatec Holdings, Inc., is a medical device company that designs, develops, manufactures and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities and trauma. The Company's mission is to improve lives by delivering advancements in spinal fusion technologies. The Company and its affiliates market products in the U.S. via a direct sales force and independent distributors.