SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Item 1.01 Entry into a Material Definitive Agreement.
On October 9, 2020, Ardelyx, Inc. (the “Company”) entered into that certain First Amendment to Loan and Security Agreement (the “Amendment”), which amended that certain Loan and Security Agreement (the “Loan Agreement”), dated as of May 16, 2018, among the Company, Solar Capital Ltd. and the lenders party thereto, by extending the period of time that the Company is permitted to make interest-only payments on the term loan facility under the Loan Agreement (the “Term Loan”) from December 1, 2020 to December 1, 2021 (the “Interest Only Period”); provided that if (a) the U.S. Food and Drug Administration (“FDA”) does not approve the Company’s New Drug Application for tenapanor for control of serum phosphorus in adult chronic kidney disease (“CKD”) patients on dialysis on or before May 31, 2021 or (b) the FDA issues a complete response letter (“CRL”) for tenapanor for the control of serum phosphorus in adult CKD patients on dialysis, then the Interest Only Period will be shortened to the earlier of (x) June 1, 2021 or (y) the first day of the month immediately following the date that the FDA issues the CRL.
In addition, the Company has agreed to (i) increase the fee that is due upon the earliest to occur of the maturity date, the acceleration of the Term Loan, the prepayment or repayment of the Term Loan or the termination of the Loan Agreement from 3.95% of the Term Loan to 4.95% of the Term Loan and (ii) set a minimum LIBOR rate of 0.25%.
The above summaries of the material terms of the Amendment do not purport to be complete and are qualified in their entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Cover Page Interactive Data File (embedded within the Inline XBRL document).
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 14, 2020
/s/ Justin Renz
Chief Financial Officer
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of October 9, 2020 (the “Amendment Effective Date”), is made by and among Ardelyx, Inc., a Delaware corporation (“Borrower”), Solar Capital Ltd., a Maryland corporation (“Solar”), in its capacity as collateral agent for Lenders (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”), and the Lenders listed on Schedule 1.1 of the Loan and Security Agreement (as defined below) or otherwise a party hereto from time to time including Solar in its capacity as a Lender and Western Alliance Bank, an Arizona corporation, as a Lender (each a “Lender” and collectively, the “Lenders”).
The Borrower, the Lenders and Collateral Agent are parties to a Loan and Security Agreement dated as of May 16, 2018 (as amended, restated or modified from time to time, the “Loan and Security Agreement”). The Borrower has requested that the Lenders agree to certain amendments to the Loan and Security Agreement. The Lenders have agreed to such request, subject to the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
“Amortization Date” means December 1, 2021; provided, however, if either (a) the FDA does not approve the Borrower’s New Drug Application for tenapanor for control of serum phosphorus in adult chronic kidney disease patients (CKD) on dialysis on or before May 31, 2021 or (b) the FDA issues a complete response letter (“CRL”) for tenapanor for the control of serum phosphorus in adult chronic kidney disease patients (CKD) on dialysis, in each case, subject to reasonable verification by Collateral Agent (including supporting documentation reasonably requested by Collateral Agent), then the Amortization Date shall mean the earlier of (x) June 1, 2021, or (y) the first (1st) day of the month immediately following the date that the FDA issues a CRL to Borrower.
“Final Fee” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest or any other fee payable hereunder) (a) due on the earliest to occur of (i) the Maturity Date, (ii) the
acceleration of the Term Loan, and (iii) the prepayment of the Term Loan pursuant to Section 2.2(c) or (d), and (b) equal to four and ninety-five hundredths of a percent (4.95%) of the aggregate principal amount of the Term Loan advanced hereunder. The Final Fee shall be fully earned on the date so paid, non-refundable for any reason and payable ninety percent (90%) to Solar and ten percent (10%) to Western Alliance Bank.
“LIBOR Rate” means the greater of (i) one quarter of a percent (0.25%) and (ii) the rate per annum rate published by the Intercontinental Exchange Benchmark Administration Ltd. (the “Service”) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) for a term of one (1) month, which determination by Collateral Agent shall be conclusive in the absence of manifest error; provided that if, at any time, Lenders notify Collateral Agent that Lenders have determined that (x) Lenders are unable to determine or ascertain such rate, (y) the applicable regulator has made public statements to the effect that the rate published by the Service is no longer used for determining interest rates for loans and (z) deposits in eurodollars in the applicable amounts or for the relative maturities are not being offered for such period, then the interest rate on the Term Loan (as set forth in Section 2.3(a) hereof) shall be equal to an alternate benchmark rate and spread mutually agreed between Collateral Agent and Borrower, giving due consideration to (i) market convention and (ii) selection, endorsement or recommendation by a relevant Governmental Authority. Such alternative benchmark rate and spread shall be binding unless the Required Lenders object within five (5) days following notification of such alternate benchmark rate and spread.
“If to Collateral Agent:
SOLAR CAPITAL LTD.
500 Park Avenue, 3rd Floor
New York, NY 10022
Attention: Anthony Storino
with a copy (which shall not constitute notice) to:
DLA Piper LLP (US)
500 8th Street, NW
Washington, DC 20004
Attn: Eric Eisenberg
Fax: (202) 799 5211
[Balance of Page Intentionally Left Blank; Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.
/s/ Justin Renz
Chief Financial Officer
COLLATERAL AGENT AND LENDER:
SOLAR CAPITAL LTD.,
/s/ Nandan S. Munshi
Nandan S. Munshi
SCP PRIVATE CREDIT INCOME FUND SPV, LLC,
/s/ Nandan S. Munshi
Nandan S. Munshi
WESTERN ALLIANCE BANK,
/s/ Bill Wickline
Head of Life Sciences
[Signature Page to First Amendment to Loan and Security Agreement]
Term Loan Commitment
Solar Capital Ltd.
SCP Private Credit Income Fund SPV, LLC
Western Alliance Bank