Mind Medicine (MindMed) Inc. announced it has entered into a term loan and security agreement with a lenders and it will receive senior secured credit facility for a gross proceeds of $50,000,000 on August 11, 2023. The transaction will include participation from new lender, K2 HealthVentures and each other lenders that may from time to time become a party thereto. The term loan matures on August 1, 2027, and the obligations of the borrowers under the loan agreement are secured by substantially all of the assets of the borrowers, excluding intellectual property. The term loan bears a variable interest rate equal to the greater of (i) 10.95% and (ii) the sum of (a) the prime rate as reported in the wall street journal plus (b) 2.95%. The company may prepay, at its option, all, but not less than all, of the outstanding principal balance and all accrued and unpaid interest with respect to the principal balance being prepaid of the term loan, subject to certain prepayment notice requirements; provided that such prepayment notice may be conditioned upon the effectiveness of a refinancing or any other transaction, in which case such prepayment notice may be revoked by the borrowers. The lenders may elect at any time following the closing date and prior to the full repayment of the term loan to convert any portion of the principal amount of the term loans then outstanding, up to an aggregate principal amount of $4 million, into the company?s common shares at a conversion price equal to $4.01 per conversion share, subject to certain limitations. The conversion price will be subject to adjustment upon the occurrence of certain events which include, but are not limited to, payment of dividends and distribution of shares. The loan agreement also provides the lenders with certain piggyback registration rights with respect to the conversion shares. The loan agreement contains customary representations and warranties and affirmative and negative covenants for financings of this type, including covenants that limit or restrict the ability of the Borrowers or their subsidiaries to, among other things: dispose of assets; make changes to their business, management, ownership or business locations; merge or consolidate; incur additional indebtedness, encumbrances or liens; pay dividends or other distributions or repurchase equity; make investments; and enter into certain transactions with affiliates, in each case subject to certain enumerated exceptions. The loan agreement contains customary events of default for financings of this type, including pursuant to a change in control. Upon the occurrence and continuation of an event of default, all amounts due under the loan agreement become or may become immediately due and payable.

On same the date, the company has received $15 million in its first tranche. And subsequent tranches of term loans totaling $20 million to be funded upon the achievement of certain time-based clinical and regulatory milestones, and an additional tranche term loan of up to $15 million upon the company?s request, subject to review by the lenders of certain information from the company and discretionary approval by the lenders.