Item 1.01 Entry into a Material Definitive Agreement.
The information required by this Item 1.01 relating to the CE Marking Royalty Rights (as defined below) is set forth under the heading “CE Marking Royalty Rights” under Item 2.03 of this Current Report on Form8-K and is incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant.
On May 15, 2019, Quotient Limited (the “Company”) completed the closing (the “CE Marking Notes Closing”) of its offering (the “CE Marking Notes Offering”) of $25.0 million aggregate principal amount of its 12% senior secured notes due 2024 (the “CE Marking Notes”) issued pursuant to the Indenture (as defined below), and those certain purchase agreements, dated as of January 15, 2019 and as amended on April 30, 2019, among the Company, the Guarantors and the purchasers named therein (the “Purchasers”).
Prior to the CE Marking Notes Closing, the Company had previously issued pursuant to the Indenture an initial $84.0 million aggregate principal amount of its 12% senior secured notes (the “Initial Notes”) on October 14, 2016, as reported in the Company’s Current Report on Form8-K filed October 14, 2016 (the “Initial Notes Closing8-K”), and an additional $36.0 million aggregate principal amount of its 12% senior secured notes (the “Additional Notes” and, together with the Initial Notes and the CE Marking Notes, the “Notes”) on June 29, 2018, as reported in the Company’s Current Report on Form8-K filed June 29, 2018 (the “Additional Notes Closing8-K”).
The Company estimates that the net proceeds from the CE Marking Notes Closing will be approximately $24.1 million, after deducting the estimated CE Marking Notes Offering expenses payable by the Company in connection with the CE Marking Notes Closing. The CE Marking Notes were sold only to qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).
The Company plans to use the net proceeds from the CE Marking Notes, among other things, to pay $1.5 million into the Cash Reserve Account pursuant to the Indenture and for general corporate purposes.
Except as described below, the CE Marking Notes purchased by each Purchaser at the CE Marking Notes Closing have the same terms as the Initial Notes and the Additional Notes. The issuance date of the CE Marking Notes is May 15, 2019 and the initial interest payment date of the CE Marking Notes is October 15, 2019. In addition, interest on the CE Marking Notes accrues commencing on May 15, 2019. The CE Marking Notes will be treated as a single series with the Initial Notes and the Additional Notes, except that the CE Marking Notes will have a different CUSIP number from that of the Initial Notes and the Additional Notes and will not be fungible with the Initial Notes or the Additional Notes for U.S. federal income tax purposes.
The CE Marking Notes purchased by each Purchaser at the CE Marking Notes Closing, the related guarantees and the CE Marking Royalty Rights (as defined below) have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. The holders of the CE Marking Notes do not have any registration rights.
The description of the Notes contained herein is qualified in its entirety by reference to that certain indenture (which contains forms of the Notes), dated as of October 14, 2016, by and among the Company, the Guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, as trustee and collateral agent (the “Original Indenture”), which was filed as Exhibit 4.1 to the Initial Notes Closing8-K, and is incorporated herein by reference, as supplemented and amended by that certain supplemental indenture (which includes amendments to the Notes), dated as of December 4, 2018, by and among the Company, the Guarantors and U.S. Bank National Association, as trustee and collateral agent (the “Supplemental Indenture” and, the Original Indenture, as supplemented and amended by the Supplemental Indenture, the “Indenture”), which was filed as Exhibit 4.1 to the Company’s Current Report on From8-K filed on December 4, 2018 (the “Supplemental Indenture Closing8-K”), and is incorporated herein by reference.
