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AxoGen Secures $25MM Term Loan From Oberland Capital

November 14, 2014, 07:04 AM
Filed Under: Medical
Related: AxoGen, Term Loan

AxoGen, Inc. has entered into a $28.55 million financing agreement with Three Peaks Capital S.a.r.l., an indirect wholly-owned subsidiary of Oberland Capital Healthcare Master Fund LP. The financing from Oberland, along with $1.75 million in capital from the company, enables AxoGen to retire the company's royalty agreement with PDL BioPharma, Inc. and substantially reduces AxoGen's future annual debt payments.

"Our agreement with Oberland is a transformational event for AxoGen," said Bob Johnston, Chief Financial Officer. "The agreement allows us to retire our previous royalty contract and reduce our annual debt payments by several million dollars, freeing cash flow to support sales and marketing growth strategies. In addition, as part of this arrangement, Oberland has taken an equity position in our Company further validating their confidence in AxoGen's growth potential."

Under the terms of the agreement, AxoGen received a six-year term loan of $25 million with interest only payments due quarterly and a final principal payment due at the end of the six year term. The interest rate at closing is 10% which is calculated at 9% plus the greater of LIBOR or 1%. From April 1, 2016 to June 29, 2016, the company has the option to draw an additional $7 million at the same terms subject to the company meeting certain conditions.

In addition, AxoGen has entered into a ten-year Revenue Interest Agreement with Oberland with a royalty rate of 3.75% of the company's revenues up to a maximum of $30 million in revenue during any 12 month period. The company has the option to prepay, at any time, in whole or in part, the Term Loan and the Revenue Interest Agreement.

In connection with the transaction, the company also sold 1,375,969 shares of AxoGen common stock to Oberland for $3.55 million. Under a separate agreement, the company also issued 643,382 shares of AxoGen common stock to PDL BioPharma for approximately $1.75 million.

AxoGen is a leading medical technology company dedicated to peripheral nerve repair.

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