August 24, 2016 8:59 AM ET

Healthcare Equipment and Supplies

Company Overview of SynCardia Systems, Inc.

Company Overview

SynCardia Systems, Inc., a medical technology company, focuses on developing, manufacturing, and commercializing the SynCardia temporary Total Artificial Heart (TAH-t) in the United States, European Union, and Canada. Its SynCardia TAH-t is an implantable system designed to assume the full function of a failed human heart in patients suffering from advanced heart failure. The company was founded in 2001 and is headquartered in Tucson, Arizona. On July 1, 2016, SynCardia Systems, Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

1992 East Silverlake Road

Tucson, AZ 85713

United States

Founded in 2001

116 Employees

Phone:

520-545-1234

Fax:

520-903-1783

Key Executives for SynCardia Systems, Inc.

Chief Executive Officer, President and Director
Age: 61
Co-Founder and Director
Age: 73
Co-Founder, Chief Scientific & Medical Officer and Chairman of Science Advisory Board
Age: 60
Senior Vice President of Regulatory Affairs and Quality
Age: 69
Vice President of Communications
Compensation as of Fiscal Year 2016.

SynCardia Systems, Inc. Key Developments

Bidding Procedure Approved for SynCardia Systems, Inc.

The US Bankruptcy Court approved the bidding procedures relating to the sale of substantially all the assets of SynCardia Systems, Inc. on August 5, 2016. As per the order, debtor has been authorized to sell either a business or all the assets as per the approved bidding procedures. The Court has also approved the sale of substantially all its assets to Sindex SSI Lending, LLC, the stalking horse bidder, for a purchase price of $0.15 million in cash and a partial credit bid of $19 million plus amounts owing under the debtor in possession financing facility and the assumption of certain liabilities pursuant to the asset purchase agreement. As per per the approved bidding procedures, bid deadline has been fixed for September 13, 2016. Each qualified bid should accompany with a good-faith deposit of 5% of the purchase price. Minimum overbid should be of at least sum of stalking horse price plus break-up fee plus $0.03 million. The auction will be held on September 14, 2016. Objection to the sale can be filed by September 9, 2016. Sale hearing will be held on September 16, 2016.

Interim DIP Financing Approved for SynCardia Systems, Inc.

The US Bankruptcy Court gave an order to SynCardia Systems, Inc. to obtain DIP financing on an interim basis on July 6, 2016. As per the order, the debtor has been authorized to obtain a senior secured, super-priority delayed draw term loan facility in the amount of $0.25 million from total facility of $0.96 million from the lenders party with Sindex SSI Lending, LLC, acting as the administrative agent for itself and other loan party and SWK Funding, LLC, acting as collateral agent. The DIP loan would carry an interest rate of 13.5%, payable monthly in kind, along with an additional 2% p.a. interest in the event of default. As per the terms of the DIP agreement, the loan carries a unused facility fee of 0.5% p.a. on the unused amount of the loan, facility fee of 2% of the interim order amount, which shall be fully-earned and added to the outstanding principal amount of the facility upon the entry of the interim order. The DIP loan will also carry an exit fee of 2% of the amount of the facility outstanding on the termination date. The DIP facility would mature either on first business day after August 25 2016 or on the date of consummation of the sale of substantially all assets of conversion of the case to chapter 7 or occurrence of an event of default, whichever is earlier. Adequate protection would be provided to the DIP lenders in the form of super-priority administrative expense claims which is subject to a carve-out of all fees required to be paid to the clerk of the Court and to the US Trustee, reasonable fees incurred by a trustee not exceeding $15,000, all professional fees of up to $0.05 million towards unpaid professional fees / administrative expenses and first priority lien upon and security interest in the debtor’s collateral. Michael Fox and Jonathan Deblinger of Olshan Frome Wolosky LLP acted as legal counsel for the loan party. Final hearing is scheduled for August 1, 2016.

Motion for Asset Sale Filed by SynCardia Systems, Inc.

SynCardia Systems, Inc. filed a motion in the US Bankruptcy Court for the sale of substantially all its assets on July 1, 2016. The debtor seeks the Court’s approval for the sale of substantially all its assets to Sindex SSI Lending, LLC, the stalking horse bidder, for a purchase price of $0.15 million in cash and a partial credit bid of $19 million plus amounts owing under the debtor in possession financing facility and the assumption of certain liabilities pursuant to the asset purchase agreement. To qualify as a qualified bidder, interested parties should submit their bids by August 15, 2016 and must be accompanied by a cash deposit in an amount equal to 5% of the cash portion of the highest proposed purchase price. The initial minimum overbid should be at least $0.25 million more than the initial purchase price plus the break-up fee and expense reimbursement. The debtor has scheduled an auction on August 19, 2016. At the auction, the subsequent bids would be in increments of $0.1 million. The stalking horse bidder would be entitled to a break-up fee of 3% of the purchase price and expense reimbursement in an amount not to exceed $1.75 million in case of termination of the asset purchase agreement. The sale hearing is scheduled for August 22, 2016.

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Recent Private Companies Transactions

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July 1, 2016
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