CAREDX, INC. (NASDAQ:CDNA) Files An 8-K Entry into a Material Definitive Agreement

CAREDX, INC. (NASDAQ:CDNA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

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On April17, 2018, CareDx, Inc. (the “Company”) entered into a Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings II, LP (“Perceptive”), as a lender and administrative agent (in such capacity, the “Agent”) for the several banks and other financial institutions or entities from time to time party to the Credit Agreement (collectively, the “Lenders”) for an initial term loan of $15.0million (the “Tranche A Term Loan”), with a second tranche of $10.0million available at the Company’s option, subject to the satisfaction of customary conditions (the “Tranche B Term Loan” and, together with the Tranche A Term Loan, the “Term Loan”). The proceeds of the Tranche A Term Loan will be used for general corporate purposes and for the repayment of the Company’s outstanding indebtedness with FastPartner AB, Mohammed Al Amoudi and Danske Bank A/S, as well as for general corporate purposes.

The Tranche A Term Loan was funded on the date of closing. The Company paid a fee of $262,500 to Perceptive as the administrative agent in connection with the Tranche A Term Loan. In connection with the Credit Agreement, on April17, 2018, the Company issued to Perceptive a warrant (the “Warrant” and, together with the Credit Agreement and the Security Agreement, the “Financing Documents”), to purchase up to 140,000 shares of common stock of the Company (“Common Stock”) at an initial exercise price of $8.60, subject to adjustment as provided in the Warrant. The Warrant will become initially exercisable commencing six months after the date of issuance of the Warrant and will terminate, if not earlier exercised, on April17, 2025.

The Tranche B Term Loan is available at the Company’s option at any time from April17, 2018 to April17, 2019, subject to the Company achieving certain product revenue targets, issuing the Tranche B Warrant (as defined below) and satisfying customary conditions. In the event the Company exercises its option for the Tranche B Term Loan, the Company will pay to Perceptive as the administrative agent out of the proceeds of the Tranche B Term Loan a fee in the amount equal to 1.75% of the principal amount of the Tranche B Term Loan advanced on such date. If the Tranche B Term Loan is funded, the Company will issue to Perceptive an additional warrant to purchase up to 93,333 shares of Common Stock (the “Tranche B Warrant”). The Tranche B Warrant will be on substantially the same terms, and in substantially the same form, as the Warrant.

In connection with the Credit Agreement, the Company entered into a Security Agreement with Perceptive, as Administrative Agent (the “Security Agreement”). The Security Agreement provides that the Term Loan is secured by substantially all of the Company’s assets and a pledge of 65% of the equity interests of CareDx International AB. The Term Loan accrues interest per annum at 9.00% (the “Applicable Margin”) plus the greater of the one-month LIBOR or 1.5%. Payments under the Credit Agreement are interest-only until the first principal payment is due on the last day of the first calendar month following April17, 2021, followed by monthly payments of principal and interest through the scheduled maturity date on April17, 2023. The Term Loan will mature on April17, 2023, but may be prepaid by the Company, in whole or in part at any time, subject to a prepayment fee.

The Credit Agreement contains customary affirmative and restrictive covenants and representations and warranties, including financial reporting obligations and limitations on indebtedness, liens, fundamental changes, acquisitions, investments, dividends or distributions, corporate changes, asset sales, affiliate transactions, material agreements, licenses, sale and leaseback transactions, hazardous materials, accounting, compliance with laws and reimbursement of certain expenses of the Lenders. The Credit Agreement also contains other customary provisions, such as expense reimbursement and confidentiality obligations, as well as indemnification rights for the benefit of the Agent and the Lenders.

The Credit Agreement provides for customary events of default, including, among other things, nonpayments of principal, interest and other amounts, inaccuracies in representations and warranties, failure to comply with covenants, defaults on other material indebtedness, bankruptcy or insolvency, judgments, changes of control or impairments of the Lenders’ security interests. Upon the occurrence of an event of default and following any applicable cure periods, if any, the Applicable Margin shall automatically increase 3.00% per annum (the “Default Rate”). This Default Rate may be applied to the outstanding loan balances, and the Agent may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Credit Agreement.

The representations, warranties and covenants contained in the Financing Documents were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Financing Documents, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Financing Documents are incorporated herein by reference only to provide investors with information regarding the terms of the Financing Documents, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Securities and Exchange Commission.

The foregoing descriptions of the Financing Documents do not purport to be complete and are qualified in their entirety by reference to the Financing Documents. Copies of the Financing Documents will be filed with the Securities and Exchange Commission as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ending June30, 2018.

Item 1.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information regarding the Term Loan set forth under Item 1.01 of this Form 8-K is incorporated by reference in this Item 1.01.

Item 1.01. Unregistered Sales of Equity Securities.

The information regarding the Warrant set forth under Item 1.01 of this Form 8-K is incorporated by reference in this Item 1.01. The Company issued to Perceptive the Warrant in reliance on the exemption from registration provided for under Section4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company relied on this exemption from registration for private placements based in part on the representations made by Perceptive, including the representations with respect to Perceptive’s status as an accredited investor, as such term is defined in Rule 501(a) of the Securities Act, and Perceptive’s investment intent.

Item 1.01. Other Events.

On April18, 2018, the Company issued a press release announcing the entry into the Term Loan and Credit Agreement. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 1.01. Financial Statements and Exhibits.

(d) Exhibits.

CareDx, Inc. Exhibit
EX-99.1 2 d573197dex991.htm EX-99.1 EX-99.1 Exhibit 99.1   CareDx Closes Debt Refinancing $15 Million Term Loan with Perceptive Advisors BRISBANE,…
To view the full exhibit click here


CareDx, Inc. is a molecular diagnostics company. The Company is focused on the discovery, development and commercialization of clinically differentiated diagnostic surveillance solutions for transplant patients. The Company’s commercialized testing solution, the AlloMap heart transplant molecular test (AlloMap), is a gene expression test that helps clinicians monitor and identify heart transplant recipients with stable graft function having a low probability of moderate/severe acute cellular rejection. Its products under development for transplant monitoring include AlloSure, a development-stage transplant surveillance solution, which applies next generation sequencing to detect and quantitate genetic differences between donor-derived cell-free deoxyribonucleic acid (dd-cfDNA) in the blood stream emanating from the donor heart. It offers the AlloMap Score Variability service, which provides complementary information to help personalize long-term care of heart transplant recipients.

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