Theratechnologies finalized all documentation giving effect to the amendments of some terms and conditions of its credit agreement dated July 20, 2022, as amended from time to time, with certain funds and accounts for which Marathon Asset Management acts as investment manager.
The amendments to the credit agreement provide for, inter alia:
- Revising the minimum liquidity requirements for all times following Oct. 31, 2023 to be between $15 million and $20 million, based on thresholds for adjusted EBITDA over the most recently ended four fiscal quarters.
- Revising the minimum revenue requirements to be based on adjusted EBITDA-based targets instead of quarterly revenue-based targets, beginning with the quarter ending Nov. 30, 2023.
- Deleting the prohibition against the company having a going concern explanatory paragraph in the opinion of the independent registered public accounting firm of the company that accompanies the company’s annual report.
As disclosed in its Sept. 25, 2023 press release, in consideration of the proposed amendments, the company agreed to pay an amount equal to $600,000, or 100 basis points calculated on the outstanding principal amount of the funded debt as of Oct. 16, 2023 ($60 million), which such amount was added to the outstanding principal amount of the funded debt as payment in kind; and to reprice the exercise price of the common share purchase warrants held by Marathon to $0.575 per share from $1.45 per share.
Following the share consolidation completed on July 31, 2023, the exercise of four warrants and the payment of $2.30 are required to subscribe to one common share of Theratechnologies, for up to a maximum issuance of 1,250,000 common shares. The warrants can be exercised until Feb. 27, 2030.