AXOGEN, INC. (NASDAQ:AXGN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, Axogen Corporation (“AC”), a Delaware corporation and wholly owned subsidiary of Axogen, Inc. (“Inc.”) (collectively AC and Inc. are referred to herein as the “Company”) plan to develop a new processing facility for Avance® Nerve Graft and Avive Soft Tissue Membrane® to provide continued capacity for growth and to support the transition of Avance Nerve Graft from a 361 HCT/P tissue product to a biologic product. As part of this plan, AC entered into an Agreement for Purchase and Sale of Real Property, dated as of June 8, 2018, with ARC CRVANOH001, LLC, a Delaware limited liability company, to which AC acquired a 70,000 square foot building on approximately 8.6 acres of land located in Vandalia, Ohio (the “Property”).
On July 9, 2019, AC entered into a Standard Form of Agreement Between Owner and Design-Builder (the “Design-Build Agreement”) with CRB Builders, L.L.C., a Missouri limited liability company (“CRB”), to which CRB will renovate and retrofit the Property. Once completed, the Company will use the Property for material processing, medical laboratory, general office, training and meeting purposes. The Design-Build Agreement contains several design phase milestones beginning in July 2019 and sets the date for Substantial Completion (as defined in the Design-Build Agreement) in the third quarter of 2020, subject to adjustment in accordance with the terms of the Design-Build Agreement. The estimated cost to the Design-Build Agreement is $29,000,000. Additional costs associated with the renovation, purchasing of furniture and equipment, validation and certification of the Property are estimated to be $13,000,000. These capital expenditure costs will be incurred as they arise until the anticipated full transition of material processing to the Property by early 2022.
The Company expects to receive certain economic development grants from state and local authorities totaling up to $2.7 million including $1.3 million of cash grants to offset costs to acquire and develop the Property. The economic development grants are subject to certain job creation milestones by 2023 and related contingencies.
The foregoing summary of the material terms of the Design-Build Agreement is qualified in its entirety by reference to the full text of the Design-Build Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.