Stereotaxis
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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 06/17/2004
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Debt Service

       In January 2002, we entered into a loan and security agreement with Silicon Valley Bank to provide $2.0 million of equipment financing. Borrowings under this facility accrue interest at an annual rate of 10%. We are required to make equal payments of principal and interest under this facility through its maturity in December 2004. We issued warrants to the lender in connection with this facility. Upon the closing of this offering, these warrants will be exercisable at any time through January 2007 for up to 50,692 shares of our common stock at an exercise price of $2.17 per share. As of March 31, 2004, we had approximately $543,000 outstanding under this facility. We may repay all or a portion of this loan with proceeds from this offering.

       In October 2002, we entered into a loan and security agreement with Silicon Valley Bank to provide an additional $1.0 million of equipment financing. Borrowings under this facility accrue interest at an annual rate of 10%. We are required to make equal payments of principal and interest under this facility through September 2005. As of March 31, 2004, we had approximately $494,000 outstanding under this facility. We issued warrants to the lender in connection with this facility. Upon the closing of this offering, these warrants will be exercisable at any time through October 2007 for up to 18,000 shares of our common stock at an exercise price of $2.17 per share. We may repay all or a portion of this loan with proceeds from this offering.

       In March 2002 we entered into a loan and security agreement with Silicon Valley Bank for a revolving line of credit to provide working capital. We use this line of credit to fund inventory and receivables. As of March 31, 2004 we had $1.25 million outstanding under this working capital line of credit and had additional borrowing capacity of $1.75 million. As of March 31, 2004, the interest rate on borrowings outstanding under this facility was 6.75% per annum. In April 2004, we increased this revolving credit line to a maximum of $8.0 million, subject to collateralization by qualifying receivables and inventory balances, with a maturity of April 2006. As amended, borrowings accrue interest at the lender’s prime rate plus 1.25%, subject to a minimum interest rate of 5.25%. We issued warrants to the lender in connection with this facility in March 2002. Upon the closing of this offering these warrants will be exercisable at any time through March 2007 for up to 36,868 shares of our common stock at an exercise price of $2.17 per share. We may repay all or a portion of this loan with proceeds from this offering.

       In April 2004, in connection with extending our revolving credit facility, we obtained an additional $2.0 million of equipment financing. When drawn, the equipment financing will be repayable over 36 months following closing and borrowings will accrue interest at the rate of 7.0%.

       The above credit agreements with Silicon Valley Bank are secured by substantially all of our assets. The credit agreements include customary affirmative, negative and financial covenants. For example, we are restricted from incurring additional debt, disposing of or pledging our assets, entering into merger or acquisition agreements, making certain investments, allowing fundamental changes to our business, ownership, management or business locations, and from making certain payments in respect of stock or other ownership interests, such as dividends and stock repurchases. Under our April 2004 loan arrangements, we are required to maintain a ratio of “quick” assets (cash, cash equivalents, accounts receivable and short-term investments) to current liabilities minus deferred revenue of at least 1.5 to 1, and to achieve minimum levels of revenue as defined. Following this offering, we will be required to maintain a minimum tangible net worth of at least $50.0 million as of the end of each calendar month. We are also required under the credit agreements to maintain our primary operating account and the majority of our cash and investment balances in accounts with the lender.

       In August 2003, we issued a $2.0 million cumulative convertible pay-in-kind 8%, 3-year note to Siemens pursuant to an agreement under which we purchased certain technology. The balance of the note, including accrued and unpaid interest, automatically converts into common stock immediately prior to the closing of a public offering pursuant to a registration statement filed under the Securities Act of 1933, or the Securities Act, with aggregate gross proceeds in excess of

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