Theratechnologies, a biopharmaceutical company focused on the development and commercialization of innovative therapies, entered into a first amendment to its credit agreement dated July 20, 2022 with certain funds and accounts for which Marathon Asset Management acts as investment manager.
The company and Marathon agreed to amend the terms of the credit facility by removing the condition related to the submission to the FDA of its human factors validation study related to EGRIFTA SV in order to access a $20 million second tranche of the credit facility, and by allowing the inclusion of a going concern note in the auditor’s report to shareholders for the fiscal year ended Nov. 30, 2022 without triggering an event of default.
The amendment was entered into in consideration of the issuance of an aggregate of 5,000,000 common share purchase warrants to Marathon. Each warrant entitles the holder thereof to purchase one common share of the company at a price of $ 1.45 per share until Feb. 27, 2030. The exercise price of the warrants was calculated based on the volume weighted average price of the company’s common shares on the Nasdaq over the 30 trading days for the company’s common shares immediately preceding the date of issuance of the warrants, plus a 50% premium. The exercise of the warrants may be made by paying the exercise price in cash or by way of a cashless exercise. The warrants are not listed. They are transferable only to affiliates of Marathon or to other potential lenders under the terms of the credit facility and their affiliates. The company has relied on the exemption of Section 602.1 of the Toronto Stock Exchange Company Manual to proceed with the issuance of the Warrants.
The Company’s access to the second tranche of $20 million remains subject to compliance with all of the other conditions set forth in the credit facility, including achieving net revenues of at least $75 million in the preceding 12 months prior to the disbursement of the second tranche and the absence of any event of default under the credit facility. The credit facility provides that the second tranche must be used to repay all of the outstanding $27.5 million convertible notes of the company due June 30, 2023.
“We are very pleased that Marathon accepted to amend the Credit Facility to allow us to access the second tranche without requiring the filing to the FDA of the HFS related to EGRIFTA SV. Having reached this agreement with Marathon at this stage speaks to the very good work the team has made thus far on the advancement of the HFS,” Paul Lévesque, president and CEO of Theratechnologies, said.
