MISONIX, INC. (NASDAQ:MSON) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Existing Credit Facility
On December 23, 2019 (the “Amendment Date”), Misonix, Inc. (the “Company”) and Solsys Medical, LLC, its wholly owned subsidiary (“Solsys”), entered into an amendment to their existing credit facility (the “Existing Credit Facility”) with SWK Funding LLC to which, among other things, the Existing Credit Facility was amended to provide an additional $5 million of term loans and to modify the interest payable thereunder and the financial covenants thereunder. Prior to the Amendment Date, the outstanding principal balance of the term loans under the Existing Credit Facility was $25,095,761.
The term loans under the Existing Credit Agreement (as so amended, the “Amended Credit Agreement”) accrue interest at a variable rate of the greater of 2.0% or the three-month LIBOR, with a maximum variable rate of 3%, plus a margin of between 7.50% and 10.25% depending on the Company’s earnings before interest, taxes, depreciation and amortization or market capitalization, payable quarterly. Under the Amended Credit Agreement, the Company and Solsys are required to make quarterly principal payments beginning in March, 2021 of $1,250,000 plus accrued interest, with all remaining principal and unpaid accrued interest due June 30, 2023. Under the terms of the Amended Credit Agreement, the Company is required to meet certain financial covenants.
The obligations under the Amended Credit Agreement are (i) guaranteed by Misonix OpCo, Inc. (“Misonix OpCo”), its wholly owned subsidiary, and (ii) secured by a first lien on substantially all assets of the Company, Solsys and Misonix OpCo and a second lien position on accounts receivable and inventory of the same entities.
The foregoing description of the amendment to the Amended Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the amendment to the Amended Credit Agreement, which is attached as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.
New Loan and Security Agreement
On December 26, 2019 (the “Effective Date”), the Company entered into a Loan and Security Agreement (the “New Loan and Security Agreement”) among the Company, Misonix OpCo and Solsys, as borrowers, and Silicon Valley Bank. The New Loan and Security Agreement provides for a revolving credit facility (the “New Credit Facility”) in an aggregate principal amount of $20 million, including borrowings and letters of credit. The New Loan and Security Agreement replaces the existing $5 million Loan and Security Agreement, dated as of January 22, 2019 (as amended and supplemented, the “Existing Solsys Credit Agreement”), among Solsys, as borrower, and Silicon Valley Bank. The Company did not incur any early termination penalties in connection with the termination of the Existing Solsys Credit Agreement.
Borrowings under the New Credit Facility were used to repay the outstanding amounts under the Existing Solsys Credit Agreement, and may be used by the Company for general corporate purposes and working capital. The New Credit Facility matures on the earlier of December 26, 2022.
Interest on outstanding indebtedness under the New Credit Facility accrues at a rate equal to the greater of the “Prime Rate” and 5.25%. In addition, on each year anniversary of the Effective Date, the Company is required to pay an anniversary fee of $100,000.
The New Credit Facility contains customary representations and warranties and covenants for agreements of this type, including covenants applicable to the Company and its subsidiaries limiting indebtedness, liens, substantial asset sales and mergers as well as financial maintenance covenants and other provisions. The New Credit Facility contains customary events of default. Upon the occurrence of an event of default, the lender may accelerate the indebtedness under the New Credit Facility, provided, that in the case of certain bankruptcy or insolvency events of default, the indebtedness under the New Credit Facility will automatically accelerate
The foregoing description of the New Loan and Security Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the New Loan and Security Agreement, which is attached as Exhibit 10.2 to this 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.
The disclosure under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| 10.2* | Loan and Security Agreement dated as of December 26, 2019 by and among Silicon Valley Bank and Misonix, Inc., Misonix OpCo Inc. and Solsys Medical, LLC as borrowers |
* Certain portions of the exhibit have been omitted to Rule 601(b)(10) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed.
MISONIX INC Exhibit
EX-10.1 2 f8k122319ex10-1_misonix.htm FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF DECEMBER 23,…
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About MISONIX, INC. (NASDAQ:MSON)
MISONIX, INC. (Misonix) is a surgical device company. The Company designs, manufactures and markets therapeutic ultrasonic products across the world for spine surgery, skull-based surgery, neurosurgery, wound and burn debridement, cosmetic surgery, laparoscopic surgery and other surgical applications. The Company’s products include BoneScalpel, BoneScalpel MIS System, SonicOne O.R. System and SonaStar. BoneScalpel is an ultrasonic cutting system with applications in orthopedic and reconstructive surgery, as well as neurosurgery. BoneScalpel MIS System offers deep cuts through osseous structures with minimal blood loss. Misonix SonicOne O.R. System is an ultrasonic surgical debridement system that allows surgeons to address the challenges chronic wounds present to them, the patient, and the health-care system. SonaStar is used for neurosurgical procedures, such as skull/non-skull base tumor resections, transnasal procedures and acoustic mengiomas.