Company to issue common stock purchase warrants to lender Hercules
By Marisa Wong
Madison, Wis., March 18 - MELA Sciences, Inc. entered into a loan and security agreement with Hercules Technology Growth Capital Inc. on March 15 for an up to $10 million loan, according to an 8-K filed Monday with the Securities and Exchange Commission.
Of the $10 million, $6 million was funded at closing, and the company has the option to draw down the remaining $4 million through March 17, 2014, as long as it meets some sales and revenue targets.
The loan bears interest at 10.45% per year and matures on Nov. 1, 2016.
During the first 12 months of the loan, only interest will be paid. After that the company will make 30 equal payments of principal and interest until maturity.
The loan is secured by a general lien against all of the company's assets, excluding its intellectual property assets.
According to the 8-K, Hercules is to receive a warrant to purchase a number of shares of MELA common stock equal to 775,000 divided by the exercise price of the warrant.
The exercise price will be the lower of the March 15 closing share price of $1.18 and the lowest volume-weighted average price of the company's common stock in any consecutive three trading days during the 30-day period immediately prior to March 15 or the 30-day period immediately prior to the warrant issue date.
Under the terms of the loan agreement, the warrant is to be issued within five business days of stockholder approval of the warrant.
In connection with the loan, MELA paid a $100,000 facility charge to Hercules.
In addition, on the earliest of the maturity date of the loan, the date that company prepays the entire outstanding loan amount or the date that the loan becomes due under the terms of the agreement, the company will pay an end-of-term charge of $425,000. If, however, the company fails to deliver the warrant on or before April 30, this end-of-term charge will increase by $100,000 on May 1 and will continue to increase by an additional $100,000 on the first day of each month after May 1 until the warrant is delivered.
MELA is an Irvington, N.Y.-based medical device company.
| Issuer: | MELA Sciences, Inc.
|
| Issue: | Loan
|
| Amount: | $10 million
|
| Maturity: | Nov. 1, 2016
|
| Coupon: | 10.45%
|
| Warrants: | For number of shares equal to 775,000 divided by strike price
|
| Warrant strike price: | Lower of $1.18 and the lowest volume-weighted average price of the company's common stock in any consecutive three trading days during the 30-day period immediately prior to March 15 or the 30-day period immediately prior to the warrant issue date
|
| Investor: | Hercules Technology Growth Capital, Inc.
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| Settlement date: | March 15 (for $6 million)
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| Stock symbol: | Nasdaq: MELA
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| Stock price: | $1.18 at close March 15
|
| Market capitalization: | $50.78 million
|
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