Item 1.01 Entry into a Material Definitive Agreement.
On September 2, 2021, Axcella Health Inc. (the "Company") entered into Loan and
Security Agreement (the "New Loan Agreement") with SLR Investment Corp., f/k/a
Solar Capital Ltd. ("SLR"), in its capacity as collateral agent ("Agent"), and
the parties signing the New Loan Agreement from time to time as Lenders,
including SLR in its capacity as a Lender (each a "Lender" and collectively, the
"Lenders"). The New Loan Agreement replaced that certain Loan and Security
Agreement by and among the Company and SLR, dated as of January 9, 2018, as
amended by that certain First Amendment to Loan and Security Agreement dated as
of October 7, 2018, as further amended by that certain Second Amendment to Loan
and Security Agreement dated as of November 30, 2018, as further amended by that
certain Third Amendment to the Loan and Security Agreement dated as of August
28, 2020 (as amended, the "Prior Loan Agreement").
The New Loan Agreement provides for a term loan commitment of up to $26.0
million, which funds will be used to pay off the entirety of the outstanding
term loan obligations under the Prior Loan Agreement (the "Term Loan").
Borrowings under the New Loan Agreement accrue interest at an annual rate equal
to 8.60% plus the greater of (a) the thirty (30) day U.S. Dollar LIBOR rate and
(b) 0.10%, payable monthly in arrears. As of September 2, 2021, approximately
$26.0 million is outstanding under the New Loan Agreement, which reflects only
the amount required to pay off the Term Loan. The term loans under the New Loan
Agreement each have a maturity date of September 1, 2026.
The New Loan Agreement also contains certain financial covenants, including an
unrestricted minimum cash level until certain study data conditions are met. The
New Loan Agreement contains customary representations and warranties, as well as
certain non-financial covenants, including engaging in any change of control
transaction or incurring additional indebtedness or liens. As security for its
obligations under the New Loan Agreement, the Company granted the Lenders a
first priority perfected security interest in all of the Company's existing and
after-acquired assets, including intellectual property.
The above description of the New Loan Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the New Loan
Agreement, which is filed with this Current Report on Form 8-K as Exhibit 10.1
and is 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 information set forth in Item 1.01 above is incorporated herein by
Item 9.01.Financial Statements and Exhibits.
10.1† Loan and Security Agreement, dated September 2, 2021, by and between
Axcella Health Inc. and SLR Investment Corp.
The cover page from this Current Report on Form 8-K, formatted as
104 Inline XBRL
† Portions of this exhibit (indicated by asterisks) will be omitted in accordance
with the rules of the SEC.
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