Item 1.01. | Entry into a Material Definitive Agreement. |
On August 2, 2022 (the “Closing Date”), MeiraGTx Holdings plc (the “Company”) and its wholly-owned subsidiaries MeiraGTx UK II Limited, a company incorporated in England and Wales (“MeiraGTx UK II”), and MeiraGTx Ireland DAC, a designated activity company limited by shares incorporated in Ireland (“MeiraGTx Ireland”, and together with MeiraGTx UK II, the “Subsidiary Guarantors”), entered into a senior secured financing arrangement (the “Financing Agreement”) by and among the Company, the Subsidiary Guarantors, the lenders and other parties from time to time party thereto and Perceptive Credit Holdings III, LP, as administrative agent and lender (“Perceptive”).
The Financing Agreement provides for an initial $75 million term loan (the “Initial Loan”), and the Company may request between the Closing Date and the second anniversary of the Closing Date an additional $25 million term loan tranche to be made available at Perceptive’s sole discretion (the “Discretionary Loan”, together with the Initial Loan, the “Loans”). The Loan may be used for working capital and general corporate purposes, including the payment of fees and expenses associated with the Financing Agreement.
The Loans outstanding under the Financing Agreement bear interest at a fluctuating rate per annum equal to (a) an applicable margin of 10.00% plus (b) the secured overnight financing rate administered by the Federal Reserve Bank of New York for a one-month tenor, subject to a 1.00% floor.
In addition to paying interest under the Financing Agreement, the Company is also required to pay certain fees in connection with the Loans, including, but not limited to, a facility fee in the amount of 0.75% of the aggregate principal amount of the Initial Loan, payable on the Closing Date, and 0.75% of the aggregate principal amount of the Discretionary Loan, payable on the date of borrowing of the Discretionary Loan.
The Company’s obligations under the Financing Agreement are secured by the Company’s London, UK and Shannon, Ireland manufacturing facilities, $3 million of the Company’s cash and the bank accounts of the Subsidiary Guarantors, and the issued and outstanding equity interests of the Subsidiary Guarantors. Perceptive’s security interest does not encumber any intellectual property or other cash of the Company or its subsidiaries.
The Financing Agreement matures on August 2, 2026 and is interest-only during the term. The Company may prepay the Loans prior to the maturity date, subject to the terms of the Financing Agreement, which include the payment of early prepayment fees ranging from 5% to 1% from years one through three of the Financing Agreement, and 0% thereafter, with such fees calculated as a percentage of the outstanding aggregate amount of the Loans being prepaid and the date of such prepayment.
The Financing Agreement imposes various restrictions on the Company and the Subsidiary Guarantors, including restrictions pertaining to: (i) the incurrence of additional indebtedness, (ii) limitations on liens, (iii) limitations on certain investments, (iv) making distributions, dividends and other payments, (v) mergers, consolidations and acquisitions, (vi) dispositions of assets, (vii) the Company’s maintenance of at least $3 million in a U.S. bank account, (viii) transactions with affiliates, (ix) changes to governing documents, (x) changes to certain agreements and leases and (xi) changes in control; however, certain of these restrictions contain exceptions which allow the Company to license, sell and monetize assets in its AAV-hAQP1 program in development to treat radiation induced xerostomia, its AAV-GAD program in development to treat Parkinson’s disease and its gene regulation platform technologies.
The Financing Agreement contains usual and customary events of default provisions for transactions of this type. If an event of default occurs and is continuing, Perceptive has the right to accelerate and require the Company to repay all amounts outstanding under the Financing Agreement.
Ellen Hukkelhoven, Ph.D., a member of the Company’s Board of Directors, is a managing director of Perceptive Advisors, LLC, an affiliate of Perceptive. Additionally, affiliates of Perceptive own, in the aggregate, more than 10% of the Company’s outstanding shares.
