Concert Pharmaceuticals, Inc. (NASDAQ:CNCE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry Into a Material Definitive Agreement.
Term Loan Facility
On June 8, 2017, (the Closing Date) Concert Pharmaceuticals,
Inc., (the Company), entered into a Loan and Security Agreement
(the Loan Agreement) with Hercules Capital, Inc. (Hercules) to
which Hercules agreed to make available to the Company a secured
term loan facility in the amount of $30 million (the Term Loan
Facility), subject to certain terms and conditions. The Company
borrowed $30 million under the Loan Agreement in one advance.
Inc., (the Company), entered into a Loan and Security Agreement
(the Loan Agreement) with Hercules Capital, Inc. (Hercules) to
which Hercules agreed to make available to the Company a secured
term loan facility in the amount of $30 million (the Term Loan
Facility), subject to certain terms and conditions. The Company
borrowed $30 million under the Loan Agreement in one advance.
Advances under the Term Loan Facility bear interest at a rate per
annum equal to the greater of either (i) 8.55% plus the prime
rate as reported in The Wall Street Journal minus 4.50% and (ii)
8.55%. The Loan Agreement includes covenants, limitations, and
events of default customary for similar facilities. The term of
the Loan Agreement is four years, ending June 1, 2021 (the
Maturity Date).
annum equal to the greater of either (i) 8.55% plus the prime
rate as reported in The Wall Street Journal minus 4.50% and (ii)
8.55%. The Loan Agreement includes covenants, limitations, and
events of default customary for similar facilities. The term of
the Loan Agreement is four years, ending June 1, 2021 (the
Maturity Date).
Interest is payable on a monthly basis until January 1, 2019 (the
Amortization Date). After the Amortization Date, payments shall
consist of equal monthly installments of principal and interest
payable over the next 30 months.
Amortization Date). After the Amortization Date, payments shall
consist of equal monthly installments of principal and interest
payable over the next 30 months.
The Company will pay a $300,000 facility charge on the Closing
Date.
Date.
The Company may prepay the principal of the Term Loan Facility at
any time subject to a prepayment charge (the Prepayment Charge)
equal to: 2.0% of amounts prepaid on or prior to June 1, 2018;
1.0% of amounts prepaid during the period from June 1, 2018 to
June 1, 2019; and 0.5% of amounts prepaid on and after June 1,
2019. The Prepayment Charge will be waived if the Company
completes the sale of CTP 656 to Vertex Pharmaceuticals, Inc.
(the Vertex Transaction) and prepays the Term Loan Facility after
the 90th day following the Closing Date but prior to the six
month anniversary of the Closing Date.
any time subject to a prepayment charge (the Prepayment Charge)
equal to: 2.0% of amounts prepaid on or prior to June 1, 2018;
1.0% of amounts prepaid during the period from June 1, 2018 to
June 1, 2019; and 0.5% of amounts prepaid on and after June 1,
2019. The Prepayment Charge will be waived if the Company
completes the sale of CTP 656 to Vertex Pharmaceuticals, Inc.
(the Vertex Transaction) and prepays the Term Loan Facility after
the 90th day following the Closing Date but prior to the six
month anniversary of the Closing Date.
The Company will pay a charge (the End of Term Charge) of
$1,485,000 on the date that the Term Loan Facility is paid in
full or becomes due and payable. The End of Term Charge will be
reduced to $742,500 if the Company completes the Vertex
Transaction and prepays the Term Loan Facility after the 90th day
following the Closing Date but prior to the six month anniversary
of the Closing Date.
$1,485,000 on the date that the Term Loan Facility is paid in
full or becomes due and payable. The End of Term Charge will be
reduced to $742,500 if the Company completes the Vertex
Transaction and prepays the Term Loan Facility after the 90th day
following the Closing Date but prior to the six month anniversary
of the Closing Date.
The Term Loan Facility is secured by substantially all of the
Companys assets, including all securities in domestic
subsidiaries and 65% of the securities in foreign subsidiaries,
but excluding its intellectual property, and subject to certain
exceptions and exclusions.
Companys assets, including all securities in domestic
subsidiaries and 65% of the securities in foreign subsidiaries,
but excluding its intellectual property, and subject to certain
exceptions and exclusions.
The Loan Agreement contains customary covenants for transactions
of this type and other covenants agreed to by the parties,
including, among others, (i) the provision of annual and
quarterly financial statements and insurance policies and (ii)
restrictions on incurring debt, granting liens, making
acquisitions, making loans, paying dividends, dissolving, and
entering into leases and asset sales. The Loan Agreement also
provides for customary events of default, including, among
others, events of default relating to failure to make payment,
bankruptcy, breach of covenants, breaches of representations and
warranties, change of control, judgment and material adverse
effects.
of this type and other covenants agreed to by the parties,
including, among others, (i) the provision of annual and
quarterly financial statements and insurance policies and (ii)
restrictions on incurring debt, granting liens, making
acquisitions, making loans, paying dividends, dissolving, and
entering into leases and asset sales. The Loan Agreement also
provides for customary events of default, including, among
others, events of default relating to failure to make payment,
bankruptcy, breach of covenants, breaches of representations and
warranties, change of control, judgment and material adverse
effects.
In connection with the entry into the Loan Agreement, the Company
issued warrants to certain entities affiliated with Hercules (the
Warrant Holders), exercisable for an aggregate of 61,273 shares
of the Companys common stock at an exercise price of $12.24 per
share (the Warrants). The Warrants may be exercised on a cashless
basis, and are immediately exercisable through the earlier of (i)
June 8, 2022 and (ii) the consummation of certain acquisition
transactions involving the Company as set forth in the Warrants.
The number of shares for which the Warrants are exercisable and
the associated exercise price are subject to certain proportional
adjustments as set forth in the Warrants. If the Company files a
registration statement after the issuance date of the Warrants
under which it registers any shares of its common stock, the
Company is required to register for resale the shares of common
stock exercisable under the Warrants on such registration
statement.
issued warrants to certain entities affiliated with Hercules (the
Warrant Holders), exercisable for an aggregate of 61,273 shares
of the Companys common stock at an exercise price of $12.24 per
share (the Warrants). The Warrants may be exercised on a cashless
basis, and are immediately exercisable through the earlier of (i)
June 8, 2022 and (ii) the consummation of certain acquisition
transactions involving the Company as set forth in the Warrants.
The number of shares for which the Warrants are exercisable and
the associated exercise price are subject to certain proportional
adjustments as set forth in the Warrants. If the Company files a
registration statement after the issuance date of the Warrants
under which it registers any shares of its common stock, the
Company is required to register for resale the shares of common
stock exercisable under the Warrants on such registration
statement.
The foregoing summary of the Loan Agreement and the Warrants does
not purport to be complete and is qualified in its entirety by
reference to the Loan Agreement and the Warrants, which are filed
as Exhibit 10.1 and Exhibit 4.1, respectively, to this Current
Report on Form 8-K and incorporated herein by reference.
not purport to be complete and is qualified in its entirety by
reference to the Loan Agreement and the Warrants, which are filed
as Exhibit 10.1 and Exhibit 4.1, respectively, to this Current
Report on Form 8-K and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a Registrant
Obligation Under an Off-Balance Sheet Arrangement of a Registrant
See the discussion set forth in Item 1.01, Entry into a Material
Definitive Agreement, of this Current Report on Form 8-K, which
discussion is incorporated herein by this reference.
Definitive Agreement, of this Current Report on Form 8-K, which
discussion is incorporated herein by this reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth above and referenced under Item 1.01
that relates to the issuance of the Warrants is hereby
incorporated by reference into this Item 3.02.
that relates to the issuance of the Warrants is hereby
incorporated by reference into this Item 3.02.
Neither the Company, Hercules nor the Warrant Holders engaged any
investment advisors with respect to the issuance of the Warrants,
and no finders fees were paid to any party in connection
therewith. The issuance of the Warrants was made in reliance on
the exemption from registration contained in Section 4(a)(2) of
the Securities Act of 1933, as amended, based in part on the
representations made by the Warrant Holders in the Warrants.
investment advisors with respect to the issuance of the Warrants,
and no finders fees were paid to any party in connection
therewith. The issuance of the Warrants was made in reliance on
the exemption from registration contained in Section 4(a)(2) of
the Securities Act of 1933, as amended, based in part on the
representations made by the Warrant Holders in the Warrants.
Item 9.01. Financial Statements and Exhibits.
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(d)
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Exhibits
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The Exhibits to this Current Report on Form 8-K are listed in the
Exhibit Index attached hereto.
Exhibit Index attached hereto.
About Concert Pharmaceuticals, Inc. (NASDAQ:CNCE)
Concert Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company is engaged in the discovery and development of small molecule drugs. The Company operates through the development of pharmaceutical products on its own behalf or in collaboration with others segment. It has clinical candidates under development, including AVP-786, CTP-656, CTP-730 and JZP-386. The Company’s deuterated chemical entity platform (DCE Platform) enables it to identify compounds for deuteration and to design, evaluate, develop and manufacture deuterated compounds. The Company is utilizing its DCE Platform to discover and develop product candidates for a range of indications. The Company’s product candidate, CTP-656, is a next generation potentiator that the Company is initially developing for the treatment of cystic fibrosis in patients having gating mutations, including the G551D mutation. AVP-786 is a combination of a deuterated dextromethorphan analog and a low dose of quinidine.