UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 4, 2009
Auxilium Pharmaceuticals, Inc.
(Exact Name of Registrant Specified in Charter)
Delaware | 000-50855 | 23-3016883 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
40 Valley Stream Parkway Malvern, PA | 19355 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (484) 321-5900
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EXPLANATORY NOTE
Auxilium Pharmaceuticals, Inc. (the “Company” or “Auxilium”) is filing this amendment to its Current Report on Form 8-K filed on August 4, 2009 (the “Original Report”) to supplement the description of certain terms of the Loan and Security Agreement contained in the Original Report. This amendment restates the information contained in the Original Report and contains additional information omitted from the Original Report pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission (the “SEC”).
Item 1.01. | Entry into a Material Definitive Agreement. |
On August 4, 2009, the Company and its wholly owned subsidiaries, Auxilium US Holdings, LLC (“Auxilium US”) and Auxilium International Holdings, Inc. (“Auxilium International” and collectively with Auxilium and Auxilium US, the “Borrower”) entered into a Loan and Security Agreement (the “Agreement”) with Silicon Valley Bank (“SVB”), for a two year revolving line of credit (the “Credit Facility”) with $30 million committed at closing and an “accordion feature” that provides for up to an additional $10 million of credit upon the mutual agreement of the Borrower and SVB. In the event that the Borrower’s net liquidity falls below $15 million, the availability under the Credit Facility is reduced to the lesser of (i) $30 million, and (ii) 80% of certain accounts receivable. Under the Agreement, net liquidity is defined as the Borrower’s unrestricted cash and cash equivalents at SVB, excluding any advances from SVB. In addition, each advance is subject to the accuracy of the representations and warranties relating to the Borrower and the Borrower’s compliance with its agreements and covenants included in the Agreement. Advances under the Credit Facility are secured by a lien on all of the assets of the Borrower, including intellectual property and a pledge of 100% of the stock of Auxilium US and Auxilium International and 65% of the stock of Auxilium UK Ltd. The Credit Facility can be terminated at any time but is subject to a 2% fee if such termination is made prior to August 4, 2010 and a 1% fee if such termination is made after August 4, 2010 but prior to the maturity date of August 3, 2011.
Amounts advanced under the Credit Facility bear interest at an annual rate of SVB’s prime rate, plus 0.50%, subject to a minimum prime rate of 4%; provided that if the Borrower reports two consecutive quarters of profitability and satisfies certain additional financial covenants, the 0.50% premium is removed. The Credit Facility has an unused line fee equal to 0.50% on the average unused portion. In addition, if the Borrower’s net liquidity is less than $7.5 million, SVB will also charge a 0.0625% per month collateral handling fee on the average monthly borrowing amount.
The Agreement contains certain financial covenants including a minimum adjusted quick ratio and quarterly and cumulative profitability and maximum loss restrictions. For purposes of the Agreement, the adjusted quick ratio is defined as the ratio of (i) unrestricted cash and cash equivalents plus net accounts receivable to (ii) current liabilities, excluding deferred revenue and deferred rent, plus any advances under the Credit Facility. Under the Agreement, the Borrower must maintain a monthly and quarterly minimum adjusted quick ratio of between 0.80:1.00 and 1.25:1.00, depending on the month or quarter at issue. In addition, the Borrower must NOT (x) exceed a quarterly maximum net loss of between $10 million and $30 million, depending on the quarter at issue, during the initial portion of the term of the Credit Facility, and (y) fall below a quarterly minimum net income of between $5 million and $10 million, depending on the quarter at issue, during the later portion of the term of the Credit Facility. The Agreement also contains certain operating covenants, including, but not limited to, covenants restricting the ability of the Borrower to incur additional indebtedness, pay dividends or other distributions, effect a sale of any part of the business and merge with or acquire another company.
The Agreement includes customary events of default, including, but not limited to, the occurrence of a payment default, a covenant default (including the covenants relating to the minimum adjusted quick ratio and quarterly and cumulative profitability and maximum loss restrictions), a material adverse change and the insolvency of the Borrower. Upon the occurrence of an event of default, the interest rate will be increased by 2.00% over the rate that would otherwise be applicable. In addition, upon the occurrence of an event of default, SVB may declare all obligations under the Agreement immediately due and payable and exercise remedies with respect to the collateral.
The foregoing is a summary description of certain terms of the Agreement and, by its nature, is incomplete. It is qualified in its entirety by the text of the Agreement, which is filed as Exhibit 10.2 to Auxilium’s Quarterly Report on Form 10-Q for the period ending June 30, 2009 and is incorporated herein by reference. All readers are encouraged to read the entire text of the Agreement.
Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure set forth in Item 1.01 above is hereby incorporated by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No. | Description | |
10.1 | Loan and Security Agreement, dated August 4, 2009, among Silicon Valley Bank, Auxilium Pharmaceuticals, Inc., Auxilium International Holdings, Inc. and Auxilium US Holdings, LLC (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ending June 30, 2009, File No. 000-50855, and incorporated herein by reference). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
AUXILIUM PHARMACEUTICALS, INC. | ||||||||
Date: September 23, 2009 | By: | /s/ Jennifer Evans Stacey | ||||||
Jennifer Evans Stacey, Esq. | ||||||||
Executive Vice President, General Counsel, Human Resources and Secretary |
EXHIBIT INDEX
Exhibit Number | Description | |
10.1 | Loan and Security Agreement, dated August 4, 2009, among Silicon Valley Bank, Auxilium Pharmaceuticals, Inc., Auxilium International Holdings, Inc. and Auxilium US Holdings, LLC (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ending June 30, 2009, File No. 000-50855, and incorporated herein by reference). |