X4 PHARMACEUTICALS, INC: Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant (Form 8-K)

0

Section 1.01 Entering into a Material Definitive Agreement.


On February 9, 2022, X4 Pharmaceuticals, Inc. ("X4" or the "Company") and
certain of its subsidiaries (collectively, with X4, the "Borrower") entered into
Amendment No. 3 to the Company's Amended and Restated Loan and Security
Agreement (the "Third Amendment") with the several banks and financial
institutions or entities from time to time party thereto (collectively, the
"Lender") and Hercules Capital, Inc., in its capacity as administrative agent
for itself and the Lender (in such capacity, the "Agent"). The Third Amendment
further amended that certain Amended and Restated Loan and Security Agreement
dated as of June 27, 2019 (as amended by Amendment No. 1 to Amended and Restated
Security Agreement, dated March 13, 2020, Amendment No. 2 to Amended and
Restated Security Agreement, dated December 21, 2020, and the Third Amendment,
the "Loan Agreement") among the Borrower, the Lender and the Agent.

The Loan Agreement, as amended by the Third Amendment, provides for (i) a term
loan of $25.0 million, which amount was borrowed prior to December 21, 2020,
(ii) an additional term loan advance of $7.5 million ("Tranche 2 Term Loan
Advance"), which amount was borrowed on December 21, 2020, and (iv) subject to
the Lender's investment committee's sole discretion, a right of the Borrower to
request that the Lender make additional term loan advances in an aggregate
amount of up to $17.5 million through December 31, 2022 (the "Credit Facility").

The Third Amendment terminated a right of the Borrower, subject to achievement
of certain milestones, to request that the Lender make additional term loan
advances in an aggregate amount of up to $7.5 million through June 30, 2022 and
increased, from $10.0 million to $17.5 million, the aggregate amount of
additional term loan advances that the Borrower may request, subject to the
Lender's investment committee's sole discretion, through December 31, 2022.

The Third Amendment also modified the minimum cash covenant applicable to the
Borrower. Pursuant to the Loan Agreement, effective as of the Initial Test Date
(as defined in the Loan Agreement), Borrower at all times thereafter shall
maintain cash, in an account or accounts of Borrower in which Hercules has a
first priority security interest, in an aggregate amount greater than or equal
to the greater of (i) $30.0 million or (ii) six multiplied by a metric based on
prior months' cash expenditures ("RML"); provided, however, that from and after
Borrower's achievement of certain performance milestones, the required level
shall be reduced to the greater of (x) $20.0 million, or (y) three multiplied by
the current RML. Notwithstanding this requirement, if the Borrower raises at
least $33.0 million in All Source Cash Proceeds (as defined in the Loan
Agreement) between January 1, 2022 and June 30, 2022, then upon the Initial Test
Date, the Borrower at all times thereafter shall maintain cash, in an account or
accounts of Borrower in which Hercules has a first priority security interest,
in an aggregate amount greater than or equal to $30.0 million; provided,
however, that from and after the Borrower's achievement of certain performance
milestones, the required level shall be reduced to $20.0 million. Any minimum
cash covenant applicable to the Borrower shall be extinguished subject to the
achievement of certain milestones.

Pursuant to the terms of the Loan Agreement and based on the All Source Cash
Proceeds raised by the Company to date, the Initial Test Date will initially be
the earlier of April 1, 2022 or the date on which the Company's Phase 3 clinical
trial of mavorixafor (X4P-001) in patients with Warts, Hypogammaglobulinemia,
Infections, and Myelokathexis (WHIM) Syndrome is discontinued or interrupted due
to safety or futility concerns for a period that materially and adversely
affects the planned timing of the Company's release of such trial's top-line
results. The Initial Test Date may be extended to September 1, 2022 based on the
Company's achievement of certain funding objectives prior to March 31, 2022.

The foregoing description of the Third Amendment does not purport to be complete
and is qualified in its entirety by reference to the Third Amendment, which is
filed herewith as Exhibit 10.1 and is incorporated herein by reference.


Item 2.03           Creation of a Direct Financial Obligation or an 

Obligation under a

                    Off-Balance Sheet Arrangement of a Registrant.


The information set forth in Section 1.01 of this Current Report on Form 8-K is incorporated by reference into this Section 2.03.

————————————————– ——————————




Item 9.01                  Financial Statements and Exhibits.
Exhibit No.                Description
99.1                         Amendment No. 3 to Amended and Restated Loan and Security Agreement,
                           dated as of February 9, 2022, by and among X4

Pharmaceuticals, Inc.each

                           of its Qualified Subsidiaries (including X4 

Therapeutics, Inc.), the

                           Lender, and Hercules Capital, Inc., as Agent.
104                        Cover Page Interactive Data File (embedded 

in the Inline XBRL document)

————————————————– ——————————

© Edgar Online, source Previews

Share.

About Author

Comments are closed.