Section 1.01 Entering into a Material Definitive Agreement.
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 millionthrough 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 millionthrough June 30, 2022and increased, from $10.0 millionto $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 millionor (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 millionin All Source Cash Proceeds (as defined in the Loan Agreement) between January 1, 2022and 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, 2022or 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, 2022based 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
of its Qualified Subsidiaries (including X4
Lender, and Hercules Capital, Inc., as Agent. 104 Cover Page Interactive Data File (embedded
in the Inline XBRL document)
© Edgar Online, source