OncoCyte amended its loan and security agreement with Silicon Valley Bank pursuant to which Oncocyte obtained a new $3 million secured credit facility, a portion of which was used to repay the remaining balance of approximately $400,000 on outstanding loans from the bank, plus a final payment of $116,000, under the February 21, 2017 loan agreement with the bank.
According to the related 8-K filing, the credit line under the amended loan agreement may be increased by an additional $2 million if OncoCyte obtains at least $20 million of additional equity capital, as was the case with the original loan agreement, and a positive final coverage determination is received from the Centers for Medicate and Medicaid Services for the Razor lung cancer test at a specified minimum price point per test and OncoCyte is not in default under the amended loan agreement.
Payments of interest only on the principal balance will be due monthly from the draw date through March 31, 2020 followed by 24 monthly payments of principal and interest, provided, however, that if the tranche 2 milestone is achieved the interest only payment period will be extended through September 30, 2020 followed by 18 equal monthly payments of principal plus interest. The outstanding principal balance of the loan will bear interest at a stated floating annual interest equal to the greater of 0.75% above the prime rate or 4.25% for tranche 1 loans or the greater of the prime rate or 5% per annum for tranche 2 loans.
The principal amount of all loans plus accrued interest will be due and payable to the bank at maturity on March 31, 2022. At maturity, OncoCyte will also pay the bank an additional final payment fee of $200,000. Any amounts borrowed and repaid may not be reborrowed.
OncoCyte may prepay in full the outstanding principal balance at any time, subject to a prepayment fee equal to 3.0% of the outstanding principal balance if prepaid within one year after October 17, 2019, 2.0% of the outstanding principal balance if prepaid more than one year but less than two years after October 17, 2019, or 1.0% of the outstanding principal balance if prepaid two years or more after October 17, 2019.