Cancer Genetics restructured its debt financing with Silicon Valley Bank by repaying its outstanding term loan, which was scheduled to mature in May 2017, and entering into a new two-year asset-based revolving line of credit agreement.

According to a related 8-K filing, the new SVB credit facility provides for an asset-based line of credit in an amount not to exceed the lesser of $6 million or 80% of eligible accounts receivable plus the lesser of 50% of the net collectable value of third party accounts receivable or three times the average monthly collection amount of third party accounts receivable over the previous quarter.

The ABL requires monthly interest payments at the Wall Street Journal prime rate plus 1.5% (5.5% at March 22, 2017), an annual commitment fee of 0.25% and matures on March 22, 2019. The company paid a $30,000 commitment fee at closing to SVB and will pay a fee of 0.25% per year on the average unused portion of the ABL.

The company concurrently entered into a new three year $6 million term loan agreement with Partners for Growth IV. The term loan is an interest only loan with the full principal and any outstanding interest due at maturity on March 22, 2020. Interest is payable monthly at a rate of 11.5% per annum, with the possibility of reducing to 11.0% in 2018 based on achieving certain financial milestones set forth by PFG. The company may prepay the term loan in whole or part at any time without penalty.

“During 2016 we grew our topline revenue over 50%, reduced our operating expenses significantly, and continued to launch innovative new tests and capabilities that are industry leading. Our business continues to scale, and shows tremendous demand going into 2017,” said Panna Sharma, CEO and president of Cancer Genetics. “CGI is now working with nine of the top 10 pharma and biotech companies and has made significant gains in our clinical market share due to our expansion into solid tumors, hereditary cancers and immuno-oncology.”

The obligations to SVB under the ABL facility are secured by a first priority security interest on substantially all of the company’s assets, and the obligations under the term loan to PFG are secured by a second priority security interest subordinated to the SVB lien.

Los Angeles-based Cancer Genetics develops precision medicine for oncology through molecular markers and diagnostics.