Item 1.01 Entry into a Material Definitive Agreement.
On August 9, 2022, the Company entered into (i) a Credit, Security and Guaranty
Agreement (Term Loan) (the Term Loan Agreement), among the Company, EtonBio,
Inc., a California corporation and the Company's wholly-owned subsidiary
(EtonBio and together with the Company, the Borrowers), certain subsidiaries of
the Company that may become party thereto from time to time as borrowers or
guarantors, the lenders party thereto from time to time (collectively, the Term
Loan Lenders), and MidCap Financial Trust, as administrative agent (the Term
Agent), and (ii) a Credit, Security and Guaranty Agreement (Revolving Loan) (the
Revolving Loan Agreement, and together with the Term Loan Agreement, the Loan
Agreements), among the Company, EtonBio, certain subsidiaries of the Company
that may become party thereto from time to time as borrowers or guarantors, the
lenders party thereto from time to time (collectively, the Revolving Loan
Lenders, and together with the Term Loan Lenders, the Lenders), and MidCap
Funding IV Trust, as administrative agent (the Revolving Agent).
The Term Loan Agreement provides for a secured term loan facility in an
aggregate principal amount of up to $30.0 million, comprised of (i) a tranche 1
term loan of up to $20.0 million (the Tranche 1 Term Loan), (ii) a tranche 2
term loan of up to $5.0 million (the Tranche 2 Term Loan), and (iii) a tranche 3
term loan of up to $5.0 million (the Tranche 3 Term Loan, and, with the Tranche
1 Term Loan and Tranche 2 Term Loan, the Term Loans). The Revolving Loan
Agreement provides for a secured revolving loan facility (the Revolving Loans)
in an aggregate principal amount of up to $10.0 million, subject to a borrowing
base equal to percentages of eligible accounts receivable and inventory as
determined in accordance with the Revolving Credit Agreement. The Term Loans and
Revolving Loans mature on August 1, 2027.
The Tranche 1 Term Loan was fully funded on August 9, 2022, to pay transaction
fees incurred in connection with the Loan Agreements and to repay in full the
Company's borrowings under its existing loan facility with Silicon Valley Bank,
with the remaining amount to be used be for general corporate purposes. Subject
to certain terms and conditions of the Term Loan Agreement, the Tranche 2 Term
Loan is available between January 1, 2023, and September 30, 2023, following the
Company's achievement of specified milestones relating to minimum net revenues
and minimum net cash proceeds from equity financing. Subject to certain terms
and conditions of the Term Loan Agreement, the Tranche 3 Term Loan is available
between September 30, 2024, and March 31, 2025. The proceeds of the Tranche 2
Term Loan and Tranche 3 Term Loan may be used for working capital and general
corporate purposes.
The Term Loans bear interest at a floating rate based on an adjusted term SOFR
(subject to a floor of 1.50%) for a one-month interest period, plus a margin of
5.75%. Interest on the Term Loans is payable monthly in arrears on the first day
of each month and at maturity. Following an initial interest-only period,
beginning on August 1, 2025, the outstanding principal amount of the Term Loans
is repayable in twenty-four equal monthly principal payments, with all remaining
outstanding principal, together with all accrued and unpaid interest, due at
maturity. The Term Loans may be voluntarily prepaid in full, but not in part, at
any time and are also subject to mandatory prepayments with the net proceeds of
certain dispositions and casualty events, subject to specified thresholds and
reinvestment rights. Prepayments are subject to prepayment premiums of 3.00%,
2.00%, and 1.00% of the amount prepaid for prepayments made during years one,
two, and three of the term, respectively. Once repaid, the Term Loans may not be
reborrowed. The Borrowers are also obligated to pay an exit fee equal to 4.5% of
the outstanding principal amount of the Term Loans borrowed and other customary
fees for a credit facility of this size and type.
The Borrowers may borrow, repay and reborrow the Revolving Loans until August 1,
2027, at which time the revolving commitments will terminate and all outstanding
Revolving Loans, together with all accrued and unpaid interest, must be repaid.
The proceeds of the Revolving Loans may be used for working capital needs and
general corporate purposes. As of the closing date, no Revolving Loans were
outstanding under the Revolving Loan Agreement.
The Revolving Loans bear interest at a floating rated based on an adjusted term
SOFR (subject to a floor of 1.50%) for a one-month interest period, plus a
margin of 3.00%. Interest on the Revolving Loans is payable monthly in arrears
on the first day of each month and at maturity. The Borrowers are obligated to
pay an unused line fee equal to 0.50% per annum on the unused portion of the
available revolving commitments, a fee for failure to maintain a minimum balance
under the Revolving Loan Agreement, and other customary fees for a credit
facility of this size and type.
The obligations of the Borrowers and any future guarantors are secured by liens
on substantially all of their assets.
The Loan Agreements require the Borrowers to comply with (i) a minimum net
revenue covenant and (ii) a minimum cash covenant, which requires certain
unrestricted cash to be greater than or equal to $7.0 million at all times.
The Loan Agreements contain customary affirmative and negative covenants,
including covenants limiting the ability of the Company and its subsidiaries,
among other things, to incur debt, grant liens, make distributions, enter
certain restrictive agreements, pay or modify subordinated debt, dispose of
assets, make investments and acquisitions, enter into certain transactions with
. . .
Item 1.02 Termination of a Material Definitive Agreement.
On August 9, 2022, contemporaneously with the execution and delivery of the Loan
Agreements, that certain Loan and Security Agreement, dated as of March 4, 2021,
by and among the Borrowers and Silicon Valley Bank, as subsequently amended, was
terminated in accordance with the terms thereof and all outstanding amounts were
repaid.
Item 2.02 Results of Operations and Financial Condition.
On August 9, 2022, Codex DNA, Inc. ("the Company") issued a press release (the
"Earnings Release") announcing results for the quarter ended June 30, 2022. A
copy of the Earnings Release is attached as Exhibit 99.1 to this current report
on Form 8-K and is incorporated by reference herein.
The information under Item 2.02 in this current report on Form 8-K and the
related information in the Earnings Release attached hereto shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, regardless of any
general incorporation language in such filing.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 hereof is incorporated by reference into
this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release dated August 9, 2022
104 Cover Page Interactive Data File (formatted as Inline XBRL)
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses