FUSION PHARMACEUTICALS INC. : Entering into a Material Definitive Agreement, Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Other Events (Form 8-K )
Section 1.01 Entering into a Material Definitive Agreement.
Borrowings under the three loan facilities bear interest at a variable annual rate equal to the greater of (i) 8.00% and (ii) the sum of (a) the greater of (x) 1 month LIBOR rate and (y) 0.10% plus (b) 7.90%. The Company is authorized to make interest only payments on any amounts outstanding under the Term Loans through
The Company is required to pay a final charge equal to 4.00% of the total amount of term loans funded, on the earliest of the following dates: (i) the maturity date, (ii) the acceleration of the term loans , and (iii) early repayment of term loans. The Company has the option to prepay all, but not less than all, of the outstanding principal balance of the Term Loans pursuant to the Loan Agreement. If the Company prepays all or part of the term loans before the maturity date, it is required to pay the Lender a prepayment commission based on a percentage of the unpaid principal balance of the loans, equal to 3% if payment occurs on or before 12 months after the funding date of the applicable loan, 2% if prepayment occurs more than 12 months after, but no later than 24 months after, the funding date of the applicable loan, or 1% if the prepayment occurs more than 24 months after, but no later than 36 months after, the funding date of the applicable loan, and no prepayment charge is required thereafter.
The Company’s obligations under the Loan Agreement are secured by a first ranking charge on substantially all of its assets.
The Loan Agreement contains customary representations, warranties and covenants and also includes customary events of default, including default of payment, breach of covenants, change of control and default of material adverse change. For the purposes of making certain investments and entering into certain licenses, the Company is required to maintain cash flow equal to 9 months (or, after funding of Term Loans B, 12 months) of cash flow. Upon the occurrence of an event of default, an additional late payment interest rate of 5.00% per annum may be applied to the outstanding loan balances, and the lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Loan Agreement and under applicable law, including, without limitation, termination of its obligations to extend credit to the Company.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a
Off-balance sheet arrangement of a registrant.
The information provided in Section 1.01 of this Current Report on Form 8-K is incorporated by reference into this Section 2.03.
Item 3.02 Unrecorded Sales of
In connection with the Loan Agreement and the financing of Term Loan Facility A, the Company issued to the lender warrants (the “Initial Warrants”) to purchase an aggregate of 26,110 common shares of the company, equivalent to 2.00% of the initial capital
if the remainder of Term Loan Facility A, Term Loan Facility B and/or Term Loan Facility C is funded. The additional warrants will also be equal to 2.00% of the financed term loan. The additional warrants are exercisable at the option of the holder and the exercise price will be the lesser of (a) the 10-day moving average of the market price of the common stock of the Company, as determined at the close of the day immediately preceding the financing date of the respective term loan, and (b) the market price of the common stock of the Company, as determined at the close of business on the business day immediately preceding the financing date of the respective term loan . Each warrant will expire ten years from the date of its initial issue.
The issuance of the Initial Warrants was exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof as a transaction by an issuer n not involving a public offering.
The foregoing description of the terms of the Initial Warrants, Additional Warrants and Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Warrants and Loan Agreement, copies of which will be filed with the
Section 8.01 Other Events
With the addition of Term Loan Facility A, the Company expects its cash, cash equivalents and investments from
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