| Item 1.01 | Entry into a Material Definitive Agreement. |
Amendment No. 5 to Credit Agreement
On March 29, 2023 (the “Closing Date”), Baudax Bio, Inc. (the “Company”) entered into that certain Amendment No. 5 and Consent to Credit Agreement (the “Amendment”) by and among the Company, Baudax Bio N.A. LLC (“Baudax LLC”), Baudax Bio Limited, Wilmington Trust, National Association, solely in its capacity as administrative and collateral agent (the “Agent”) and the lenders party thereto (the “Lenders”). The Amendment amends that certain Credit Agreement, dated as of May 29, 2020, by and among the Company, the Agent, and the Lenders (as amended, the “Credit Agreement”).
Pursuant to the terms of the Amendment, the Lenders consented to the transactions contemplated by the Transfer Agreement (as defined below) and agreed to release and discharge any liens granted or held by the Lenders in respect of the Assets (as defined below). Pursuant to the terms of the Transfer Agreement, the parties also agreed to, among other things, amend the minimum liquidity covenants under the Credit Agreement to require that the Company maintains $2.5 million of liquidity at all times.
Warrants
In connection with the Amendment, on the Closing Date, the Company issued warrants to MAM Eagle Lender, LLC (“MAM”) to purchase an aggregate of 785,026 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) at an exercise price equal to $1.8951 per share (the “Warrants”). The Warrants are exercisable until the tenth anniversary of the Closing Date. The holder of each Warrant has the right to net exercise the Warrant for shares of Common Stock upon exercise. A holder (together with its affiliates) may not exercise any portion of the Warrant to the extent that the holder would own more than 9.99% of the Company’s outstanding Common Stock immediately after exercise. However, upon at least 61 days’ prior notice from the holder to the Company, a holder with a 9.99% ownership blocker may increase or decrease the maximum amount of ownership of outstanding Common Stock after exercising the holder’s Warrant to any other percentage not in excess of 9.99% of the number of the Company’s Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants.
In connection with the Warrants, the Company also granted registration rights to holders of the Warrants to register the common stock subject to such Warrants (the “Warrant Shares”) under the Securities Act of 1933, as amended (the “Securities Act”) in the event the Company files a registration statement with the U.S. Securities and Exchange Commission under the Securities Act covering its equity securities, subject to the terms and conditions included in the registration rights agreement by and between the Company and MAM Eagle Lender, LLC, entered into on March 29, 2023 (the “Registration Rights Agreement”).
The Company relied on the exemption from registration contained in Section 4(2) of the Securities Act, and Regulation D, Rule 506 thereunder, for the issuance of the Warrants and the Warrant Shares. As part of executing the Amendment and receiving the Warrants and the Warrant Shares, each of lenders under the credit agreement represented that it is an “accredited investor” as defined in Regulation D of the Securities Act and that the securities purchased by it will be acquired solely for its own account for investment and not with a view to or for sale or distribution of the Warrants or the Warrant Shares or any part thereof.
The foregoing summary of the Amendment and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the Amendment and the Registration Rights Agreement, copies of which are filed as Exhibit 10.1 and 10.2 hereto and are incorporated herein by reference.
Alkermes Agreement
On March 29, 2023, the Company entered into an Asset Transfer Agreement with Alkermes Pharma Ireland Limited (“Alkermes”) (the “Transfer Agreement”). Under the terms of the Transfer Agreement, the Company transferred the rights to certain patents, trademarks, equipment, data and other rights related to ANJESO® (the “Assets”) to Alkermes. The Company also is withdrawing the New Drug Application (“NDA”) related to ANJESO and agreed, if elected by Alkermes at a later date, to transfer such withdrawn NDA to Alkermes at no additional cost.
