Item 1.01 Entry into a Material Definitive Agreement.
On January 9, 2023, Axsome Therapeutics Inc., a Delaware corporation (the
"Company"), entered into a Third Amendment (the "Third Amendment") to its Loan
and Security Agreement (the "Loan Agreement") with Hercules Capital, Inc., a
Maryland corporation ("Hercules"), in its capacity as administrative agent and
collateral agent, and the other financial institutions or entities party thereto
as lenders (the "Lenders"). The Third Amendment increases the size of the Term
Loan Advance (as defined in the Loan Agreement) to $350,000,000, reduces the
interest rate, and extends the maturity and interest-only period of the Loan
Agreement, as further described below.
The Third Amendment amended the terms of that certain Loan and Security
Agreement, dated as of September 25, 2020, by and among the Company, Hercules
and the Lenders (as amended by the First Amendment to Loan and Security
Agreement, dated as of October 14, 2021, the Second Amendment to Loan and
Security Agreement, dated as of March 27, 2022, and as further amended by the
Third Amendment) to, among other things, (i) extend the maturity date to January
1, 2028, unless the Company meets certain revenue targets as described in the
Loan Agreement, in which case the Company can extend the Maturity Date to
January 1, 2029; (ii) increase the aggregate principal amount under the Loan
Agreement from $300,000,000 to $350,000,000; (iii) subject to the terms and
conditions in the Loan Agreement, change the Term Loan Advance amounts and dates
available under the Tranche 1 Advance (as defined in the Loan Agreement) through
Tranche 5 Advance (as defined in the Loan Agreement immediately prior to the
Third Amendment), including increasing the Tranche 1 Advance (as defined in the
Loan Agreement) from one tranche of $95,000,000 to five sub-tranches of
$95,000,000, $55,000,000, $30,000,000, $35,000,000 and $35,000,000,
respectively, changing the Tranche 2 Advance (as defined in the Loan Agreement)
from three sub-tranches of $35,000,000, $35,000,000 and $30,000,000 to one
tranche of $25,000,000, changing the Tranche 3 Advance (as defined in the Loan
Agreement) from two sub-tranches of $15,000,000 and $5,000,000 to one tranche of
$75,000,000, and removing the Tranche 4 Advance (as defined in the Loan
Agreement immediately prior to the Third Amendment) and Tranche 5 Advance (as
defined in the Loan Agreement immediately prior to the Third Amendment)
entirely; (iv) revise the interest rate applicable to extensions of credit under
the Loan Agreement to equal the greater of (a) 9.95% per annum or (b) the prime
rate (as reported in The Wall Street Journal) plus 2.20% per annum, (v) increase
the minimum cash requirement of the Company to $30,000,000 (plus certain
accounts payable amounts); and (vi) pay a facility fee equal to 0.75% of the
amount of principal actually funded pursuant to the Tranche 1B Advance, Tranche
1C Advance, Tranche 1D Advance, Tranche 1E Advance, Tranche 2 Advance and
Tranche 3 Advance (each as defined in the Loan Agreement).
The foregoing description of the Third Amendment does not purport to be complete
and is qualified in its entirety by reference to the complete terms and
conditions of the Third Amendment to be filed as an exhibit to the Company's
next periodic report filed with the Securities and Exchange Commission.
Item 8.01 Other Information.
On January 9, 2023, the Company announced that in part as a result of the Third
Amendment, the Company now believes that its current cash, along with the
remaining committed capital from the Loan Agreement, is sufficient to fund
anticipated operations to cash flow positivity, based on the current operating
plan.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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