Section 1.01 Entering into a Material Definitive Agreement.
On September 20, 2022 (the “Effective Date”), BioLife Solutions, Inc.a
Delaware (the “Company” or the “Borrower”) and certain of its subsidiaries have entered into a loan and guarantee agreement (the “Loan Agreement”) with Bank of Silicon Valleya California company (the “lender”). The subsidiaries of the Company which are parties to the Loan Agreement (such subsidiaries being the “Subsidiaries”) are SAVSU Technologies, Inc., ArcticSolutions, Inc.,
SciSafe Holdings, Inc., Global Cooling Inc.and Sexton Biotechnologies, Inc.who are each Delaware companies.
In accordance with the Loan Agreement, the Lender has undertaken to make, before June 30, 2023term loans to the Company and the Subsidiaries for an aggregate principal amount of up to $40,000,000, $10,000,000 of which is available to the Company and Subsidiaries only if on or before June 30, 2023, that the Borrower reaches certain revenue milestones. In addition, subject to certain other conditions, the Lender will make additional term loans to the Company and the Subsidiaries in an amount in principal of up to $10,000,000. The Company and the Subsidiaries have granted security to the Lender on all of their assets, with the exception of their intellectual property (which they have undertaken not to encumber). The Company shall repay interest accrued on all Term Loans monthly, commencing on the first month following the Effective Date, and shall repay the Principal Amount of each Term Loan in twenty-four (24) consecutive equal monthly installments. of the capital balance from July 1, 2024 (the date of which may be extended, under certain conditions, until July 1, 2025). The loan matures on June 1, 2026although it can be extended to June 1, 2027, upon the occurrence of certain conditions. Any prepayment of the Term Loans prior to the first anniversary of the Effective Date will be subject to a prepayment penalty equal to 2% of the principal amount prepaid and, at any time thereafter, a advance payment equal to 1% of the prepaid capital amount. In addition, upon full repayment of the term loans, the Company and the Subsidiaries are required to pay the Lender an amount equal to the aggregate principal amount of all term loans granted by the Lender multiplied by 5.75%.
The principal amount outstanding on any Term Loan under the Loan Agreement will bear interest at an annual variable rate equal to the greater of (1) 5.75% and (2) Prime Rate (the interest rate annual published from time to time in the currency rates section of The Wall Street Journal or any successor publication) plus 0.50%. The aggregate interest rate applicable to each term loan shall not increase by more than 1.0% above the aggregate interest rate applicable to such term loan on the date of funding of such term loan.
The Loan Agreement contains customary covenants (subject, in each case, to certain exemptions), including restrictions on dispositions of property, debts, liens, acquisitions and investments. Failure to comply with one or more of the covenants and restrictions or the occurrence of an event of default could lead to the immediate and due payment of all or part of the principal balance of the Loan Agreement and the termination of the commitments.
This summary of the Loan Agreement is qualified in its entirety by reference to the full text of the Loan Agreement, which will be filed as an attachment to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2022.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a
Off-balance sheet arrangement.
The information set out above in point 1.01 is incorporated by reference in this point 2.03.
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