What happened

Robotic-surgery upstart Corindus Vascular Robotics Inc. (NYSEMKT:CVRS) is on the move again. This time around, investors appear pleased with a complex new financing arrangement that added $25 million to the company's war chest. The stock was up 28.6% as of 1:12 p.m. EST on Friday.

So what

Corindus surged just ahead of its fourth-quarter earnings report, then sank yesterday. One issue was a troubling lack of cash right in the middle of a major product launch. The company ended December with $17.5 million in cash and equivalents, after operations lost $8 million in the fourth quarter.

Finger drawing an upward-sloping chart

Image source: Getty Images.

Corindus raised the number of installed CorPath GRX surgical systems 43% during the final quarter of 2017. With just 33 installed, though, losses probably won't stop for a few more quarters at best.

Now what

Raising some cash to support CorPath's ongoing launch was hardly a choice for Corindus, but investors might want to read the fine print a few more times. Management touted a nondilutive capital strategy during its earnings call on Wednesday afternoon, but the Series A preferred stock it's selling is convertible into 20 million shares of common stock, at $1.25 per share. Exercising the option would raise the company's outstanding share count by 10.6% over present levels, and that's just the beginning.

The convertible preferred shares pay a whopping 12% annual dividend, to be paid in the form of more convertible preferred shares. To top it off, the company's offering investors warrants to purchase up to 8.75 million shares at $1.40 each and appointing a "seasoned investor" to the company's board of directors.

The CorPath's launch is going well, but long-term shareholders' slice of any profits it generates will get significantly smaller.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.