- The stock price of NantHealth, Inc. (Nasdaq: NH) fell by 12.33% yesterday. This is why it happened.
The stock price of NantHealth, Inc. (Nasdaq: NH) – a provider of enterprise solutions that help transform complex data into actionable insights – fell by 12.33% yesterday as it went from a previous close of $2.96 to $2.60. Investors appear to be responding negatively to the company announcing the signing of new financing that will include the issuance of $137.5 million aggregate principal amount of new senior unsecured convertible notes due 2026 (2026 Notes) in a private transaction with the common stock that may be issued upon a conversion to be registered under the Securities Act of 1933, as amended.
And as part of the transaction, NantHealth will enter into an agreement to extend the maturity of its existing subordinated note to October 2026. NantHealth intends to use the proceeds of the 2026 Notes to retire its existing convertible notes due December 2021 (2021 Notes) and further invest in initiatives to grow its business.
The 2026 Notes will be issued to two existing NantHealth investors: certain funds managed by Highbridge Capital Management, LLC, a current holder of the company’s 2021 Notes, and Nant Capital, LLC, an affiliated entity owned by the company’s majority equity investor and holder of the company’s subordinated notes. The investors will purchase $137.5 million in aggregate principal amount of the 2026 Notes. And the parties expect the 2026 Notes financing transaction to close on or before April 27, 2021.
Highbridge and Cambridge Equities, LP (also an affiliate owned by the company’s majority shareholder) have agreed to convert $5 million ($10 million in total) of their holdings of the 2021 Notes to shares of NantHealth common stock on April 14, 2021.
The 2026 Notes are going to bear interest of 4.5% that will be payable semiannually, unless earlier converted to the company’s common stock, redeemed or repurchased in accordance with their terms. And the final terms of the 2026 Notes, including the interest rate, initial conversion rate, and other terms, will be disclosed in the company’s filings with the U.S. Securities and Exchange Commission (SEC).
“This transaction provides several immediate benefits to NantHealth, including enhancing our financial flexibility and funding our growth initiatives. Not only does this financing address the upcoming maturity of our 2021 Notes, but importantly provides us with the resources to invest in our established businesses, NaviNet and Eviti, and accelerate the expansion of our recently acquired OpenNMS business. We thank our financing partners, Highbridge and Nant Capital, for their continued support.”
— Ron Louks, NantHealth’s Chief Operating Officer
“We are very pleased to increase our investment in NantHealth. Last year, NantHealth made a strategic decision to expand beyond healthcare by providing enterprise solutions to help businesses in other industries. We believe this financing will help NantHealth achieve this goal and continue further product expansion.”
— Jonathan Segal, Co-Chief Investment Officer of Highbridge
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