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Apollo Endosurgery inks agreement for up to $100 million term loans
By Wendy Van Sickle
Columbus, Ohio, Dec. 21 – Apollo Endosurgery, Inc. entered into a loan agreement on Tuesday with Innovatus Life Sciences Lending Fund I, LP as collateral agent to provide for up to $100 million of term loans, with $35 million drawn at closing, according to an 8-K filing with the Securities and Exchange Commission.
Apollo will be eligible to draw the term B loan of $15 million between July 1, 2023 and Dec. 31, 2023 and the term C loan of $25 million between July 1, 2024 and Dec. 31, 2024, in each case upon the achievement of certain minimum revenue thresholds. A term D loan of $25 million will be eligible to be drawn to finance certain approved acquisitions between June 30, 2022 and June 30, 2024.
Interest is the greater of the Prime rate or 3.25%, in each case plus 400 basis points.
The term loans are interest only from Dec. 21 through Feb. 1, 2027.
On the funding date of each term loan, a facility fee equal to 1% of the applicable loan is payable to the lenders.
Prior to Dec. 21, 2022, the term loans may only be prepaid in full upon a change of control, with payment of 3% prepayment premium. After Dec. 21, 2022, the term loans may be prepaid in full through Dec. 21, 2023 with payment of a 2% prepayment premium, thereafter through Dec. 21, 2024 with payment of a 1% prepayment premium, and thereafter with no prepayment premium. An additional final payment of 4% of the amount of terms loans advanced will be due upon prepayment or repayment of the term loans in full.
The loan agreement contains a minimum liquidity covenant, tested on a maintenance basis, and a minimum revenue covenant, tested quarterly commencing the earlier of Dec. 31, 2023 and the funding date of the term B loan.
Apollo Endosurgery is a medical device company focused on less invasive therapies for the treatment of obesity. It is based in Austin, Tex.
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