NEOGENOMICS, INC. (NASDAQ:NEO) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
On December22, 2016, NeoGenomics Laboratories, Inc. (NeoGenomics
Laboratories), as borrower, and NeoGenomics, Inc. and certain of
its subsidiaries, as guarantors (the Guarantors), entered into a
Credit Agreement with Regions Bank, as administrative agent and
collateral agent, and the lenders party thereto. The Credit
Agreement provides for a $75million revolving credit facility
(the Revolving Credit Facility) and a $75million term loan
facility (the Term Loan Facility). The Credit Agreement provides
incremental facility capacity of $50million, subject to certain
conditions.
Borrowings under the Revolving Credit Facility bear interest at a
rate per annum equal to an applicable margin plus, at NeoGenomics
Laboratories option, either (1)the Adjusted LIBOR rate for the
relevant interest period, (2)an alternate base rate determined by
reference to the greatest of (a)the prime lending rate of
Regions, (b)the federal funds rate for the relevant interest
period plus 0.5% per annum and (c)the one month LIBOR rate plus
1% per annum, or (3)a combination of (1)and (2). The applicable
margin will range from 2.25% to 3.50% for LIBOR loans and 1.25%
to 2.50% for base rate loans, in each case based on NeoGenomics
Laboratories consolidated leverage ratio (as defined in the
Credit Agreement). Interest on borrowings under the Revolving
Credit Facility is payable on the last day of each month, in the
case of each base rate loan, and on the last day of each interest
period (but no less frequently than every three months), in the
case of Adjusted LIBOR loans. The Revolving Credit Facility
includes a $10million swingline sublimit, with swingline loans
bearing interest at the alternate base rate plus the applicable
margin. Any principal outstanding under the Revolving Credit
Facility is due and payable on December21, 2021 or such earlier
date as the obligations under the Credit Agreement become due and
payable to the terms of the Credit Agreement.
The Term Loan Facility bears interest at a rate per annum equal
to an applicable margin plus, at NeoGenomics Laboratories option,
either (1)the Adjusted LIBOR rate for the relevant interest
period, (2)an alternate base rate determined by reference to the
greatest of (a)the prime lending rate of Regions, (b)the federal
funds rate for the relevant interest period plus 0.5% per annum
and (c)the one month LIBOR rate plus 1% per annum, or (3)a
combination of (1)and (2). The applicable margin will range from
2.25% to 3.50% for Adjusted LIBOR loans and 1.25% to 2.50% for
base rate loans, in each case based on NeoGenomics Laboratories
consolidated leverage ratio. Interest on the outstanding
principal of the Term Loan Facility will be payable on the last
day of each month, in the case of each base rate loan, and on the
last day of each interest period (but no less frequently than
every three months), in the case of LIBOR loans. Principal
payments will be due on the last day of each fiscal quarter
beginning March31, 2017, with quarterly principal payments of
approximately $0.94million in 2017, approximately $1.41million in
2018 and 2019, and approximately $1.88million in 2020, with the
remainder due at maturity on December21, 2021 or such earlier
date as the obligations under the Credit Agreement become due and
payable to the terms of the Credit Agreement
In addition to paying interest on outstanding principal under the
Credit Agreement, NeoGenomics Laboratories will be required to
pay a commitment fee in respect of the unutilized portion of the
commitments under the Revolving Credit Facility. The commitment
fee rate will initially be 0.375% per annum, and, following the
second quarter of 2017, will range from 0.25% to 0.5% depending
on NeoGenomics Laboratories consolidated leverage ratio.
NeoGenomics Laboratories will also pay customary letter of credit
and agency fees.
The Term Loan Facility and amounts borrowed under the Revolving
Credit Facility are secured to a Pledge and Security Agreement,
dated December22, 2016, among the parties identified as Obligors
therein and Regions, as collateral agent (the Security
Agreement), on a first priority basis by a security interest in
substantially all of the tangible and intangible assets (subject
to certain exceptions) of NeoGenomics Laboratories and the
Guarantors. NeoGenomics Laboratories obligations under the Credit
Agreement are also guaranteed by the Guarantors.
– 2 –
The Credit Agreement includes a number of restrictive covenants
that, among other things and in each case subject to certain
exceptions and baskets, impose operating and financial
restrictions on NeoGenomics Laboratories and the Guarantors,
including the ability to incur additional debt; incur liens and
encumbrances; make certain restricted payments, including paying
dividends on its equity securities or payments to redeem,
repurchase or retire its equity securities; enter into certain
restrictive agreements; make investments, loans and acquisitions;
merge or consolidate with any other person; dispose of assets;
enter into sale and leaseback transactions; engage in
transactions with its affiliates; and materially alter the
business it conducts. In addition, NeoGenomics Laboratories is
required to comply with a maximum consolidated leverage ratio (as
defined in the Credit Agreement) of 3.75:1.0 from March31, 2017
through December31, 2017, 3.50:1.0 from March31, 2018 through
December31, 2019, and 3.00:1.0 thereafter. The Credit Agreement
also contains customary representations and warranties,
affirmative covenants and events of default. NeoGenomics
Laboratories is also required to maintain a consolidated fixed
charge coverage ratio (as defined in the Credit Agreement) as of
the end of each fiscal quarter commencing with the quarter ending
March31, 2017 of not less than 1.25:1.0.
The Credit Agreement requires NeoGenomics Laboratories to
mandatorily prepay the Term Loan Facility and amounts borrowed
under the Revolving Credit Facility with (i) 50% of net cash
proceeds from certain sales and dispositions, subject to certain
reinvestment rights, (ii) 50% of net cash proceeds from certain
issuances or incurrences of additional debt, (iii)beginning with
the fiscal year ending December31, 2017, 50% of excess cash flow
(minus certain specified other payments), subject to a step down
to 0% of excess cash flow if NeoGenomics Laboratories
consolidated leverage ratio is no greater than 2.75:1.0 and (iv)
50% of net cash proceeds from issuances of permitted equity
securities by NeoGenomics Laboratories made in order to cure a
failure to comply with the financial covenants. NeoGenomics
Laboratories is permitted to voluntarily prepay the Term Loan
Facility and amounts borrowed under the Revolving Credit Facility
at any time without penalty, subject to customary breakage costs
with respect to prepayments of Adjusted LIBOR rate loans made on
a day other than the last day of any applicable interest period.
The foregoing descriptions of the Revolving Credit Facility and
the Term Loan Facility are qualified in their entirety by
reference to the respective agreements, which are filed as
Exhibits 10.1 to this Current Report on Form 8-K.
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. |
The disclosure
provided under Item 1.01 of this Current Report on Form 8-K is
hereby incorporated by reference into this Item2.03.
| Item8.01 | Other Events. |
On December22,
2016, NeoGenomics redeemed 8,066,667 shares of its outstanding
Series A Convertible Preferred Stock (the Preferred Stock),
originally issued to GE Medical Systems Information Technologies,
Inc. in connection with NeoGenomics acquisition of Clarient, Inc.
in December 2015, for an aggregate redemption amount of
$55,000,008. The redemption amount payable for each share equaled
$7.50, the current liquidation value per share of the Preferred
Stock, minus a 9.0909% discount resulting from the redemption
occurring in the first year following the issuance of the
Preferred Stock. Following the redemption, 6,600,000 shares of
the Preferred Stock remains outstanding.
– 3 –
The Company also
issued a press release announcing the facilities described in
Item 1.01 herein and the redemption described above on
December22, 2016, a copy of which is attached as Exhibit 99.1
hereto.
| Item9.01 |
| (d) | Exhibits |
|
Exhibit No. |
Description |
|
| 10.1 |
Credit Agreement, dated December22, 2016, by and among NeoGenomics Laboratories, Inc., NeoGenomics, Inc. and certain of its subsidiaries, the lenders party thereto and Regions Bank, as administrative agent. |
|
| 99.1 | Press Release |
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About NEOGENOMICS, INC. (NASDAQ:NEO)
NeoGenomics, Inc. is an operator of a network of cancer-focused genetic testing laboratories. The Company operates in Laboratory Testing Segment. Its Laboratory Testing segment delivers testing services to hospitals, pathologists, oncologists, other clinicians and researchers. The Company offers testing services, which includes Cytogenetics testing, which is the study of normal and abnormal chromosomes and their relationship to disease; fluorescence in-situ hybridization (FISH) testing, which is a branch of cancer genetics that focuses on detecting and locating the presence or absence of specific deoxyribonucleic acid (DNA) sequences and genes on chromosomes; flow cytometry testing, which is a way to measure the characteristics of cell populations, and immunohistochemistry (IHC), and digital imaging, which is a process of localizing proteins in cells of a tissue section and relies on the principle of antibodies binding specifically to antigens in biological tissues. NEOGENOMICS, INC. (NASDAQ:NEO) Recent Trading Information
NEOGENOMICS, INC. (NASDAQ:NEO) closed its last trading session 00.00 at 8.85 with 111,396 shares trading hands.