Item 1.01. Entry into a Material Definitive Agreement.
On October 13, 2021, Quotient Limited (the “Company” or “we”, “us” and “our”) received consents from all of the holders (the “Consenting Holders”) of its 12% Senior Secured Notes due 2023 (the “Notes”) issued pursuant to the Indenture, dated as of October 14, 2016 (as subsequently amended, the “Indenture”), by and among the Company, the guarantors party thereto and U.S. Bank National Association, a national banking association, as trustee and collateral agent, to certain amendments to the Indenture governing the Notes (the “Indenture Amendments”) pursuant to the Fourth Supplemental Indenture, dated as of October 13, 2021 (the “Fourth Supplemental Indenture”).
The Indenture Amendments include an 18-month extension of the final maturity of the Notes to October 2025 and a revision of the Notes’ principal amortization schedule (which previously required semi-annual payments of principal beginning April 2021) to commence April 2023. The revised amortization schedule will defer approximately $60 million of principal payments previously required to be made between April 2021 and April 2023. The interest rate on the Notes and the financial and other covenants in the Indenture remain unchanged.
In consideration for the Consenting Holders’ consents to the Indenture Amendments, the Company agreed among other things to issue them (i) an aggregate of 932,772 of the Company’s ordinary shares, nil par value per share (the “Consent Shares”) and (ii) 5-year warrants to purchase an aggregate of 1,844,020 of the Company’s ordinary shares for $4 per share (the “Consent Warrants”). The Company agreed with the Consenting Holders that the Consent Shares and Consent Warrants have an aggregate value of approximately 3.25% of the outstanding principal amount of the Notes (which is $132,916,667).
The Company sought the Indenture Amendments because the revised amortization schedule is better aligned with the Company’s anticipated capital and liquidity requirements. The Indenture Amendments will not become operative until certain conditions are satisfied, as described in more detail below.
Fourth Supplemental Indenture
The Fourth Supplemental Indenture modifies the terms of the Notes as follows:
Maturity Date. The new maturity date of the Notes will be October 15, 2025.
Amortization Schedule. The new principal amortization schedule of the Notes will be as follows:
| | | | |
Payment Date | | Amount | |
April 15, 2023 | | | $12,100,000 | |
October 15, 2023 | | | $18,100,000 | |
April 15, 2024 | | | $24,200,000 | |
October 15, 2024 | | | $24,200,000 | |
April 15, 2025 | | | $24,200,000 | |
October 15, 2025 | | | The principal balance then outstanding | |
Redemption Price for Optional Redemption. During the periods specified below, the new redemption prices for Notes redeemed pursuant to the optional redemption provisions of the Indenture will be as follows:
| | | | |
Period | | Redemption Price | |
From and including October 14, 2021 to and including April 13, 2023 | | | 106.00 | % |
From and including April 14, 2023 to and including April 13, 2024 | | | 103.00 | % |
From and including April 14, 2024 and thereafter | | | 100.00 | % |
Operative Time of Indenture Amendments. The Fourth Supplemental Indenture became effective on October 13, 2021, but the Indenture Amendments will not become operative until the Depository Trust Company issues certain proxies formally confirming the Consenting Holders’ ability to act as record holders of the Notes.
Registration Rights Agreement
In connection with the issuance of the Shares, the Company entered into a registration rights agreement, dated as of October 13, 2021 (the “Registration Rights Agreement”), between the Company and the Consenting Holders, which requires the Company to, among other things, file with the Securities and Exchange Commission within 45 days a shelf registration statement providing for resale of the Consent Shares and the shares issuable on exercise of the
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