The Plano, Texas-based neurostimulation company filed the petition earlier this week in U.S. bankruptcy court for the Eastern District of Texas. Nuvectra said it plans to use the court-supervised bankruptcy process to consider its options to maximize value and meet its financial obligations.
Topping the list among creditors with unsecured debts were two contract manufacturers, Minnetronix Medical and Greatbatch medical, is now part of Whole number (NYSE:ITGR). Minnetronix owes nearly $ 2.8 million and Greatbatch’s unsecured debt is nearly $ 2.2 million. The second largest claim is just over $ 150,000.
Minnetronix declined to comment at this early stage in the process, while Integer declined to comment on another company. Nuvectra started as a QiG group, part of Greatbatch / Integer, before its split was approved in February 2016.
Nuvectra said its board and management team believe the company and its assets are valuable and are exploring options, including a sale of the company as a whole, its Algovita Spinal Cord Stimulation System, its Virtis neuromod system or other specified assets.
The company said it is committed to supporting current patients, physicians, clinicians and facilities using Algovita. The security and functionality of the system will not be affected by the bankruptcy process, according to a press release. However, Nuvectra is suspending support for future implants until the way forward is cleared, and it recommends doctors cease new implants, trial procedures and ongoing clinical studies by then.
Nuvectra has filed several motions seeking court permission to support its operations during the bankruptcy process. Support would include a consensus motion for cash collateral and a motion to pay employee wages and benefits. The company said it expects to receive approval for the motions shortly.
“Since launching as an independent business, Nuvectra has invested in our mission to help physicians improve the lives of people with chronic conditions,” said Fred Parks, CEO of Nuvectra. noted in the output. “We have been successful in bringing Algovita to market and have opportunities in our pipeline, including Virtis, which we believe will generate value in the future. To finance our innovation and commercialization efforts, the company incurred substantial debt. We’ve been working hard to find another way forward through our extensive review of options for our business over the past few months. As a result of constructive discussions with our lenders, the court-supervised process we embark on today will give us the time and flexibility we need to continue our review of options, maximize the value of our assets and meet our obligations. financial.
Nuvectra shares rose 2.9% to 23 per share in morning trading today.