Item 1.01 Entry into a Material Definitive Agreement
Amendment to Term Loan Agreement with CRG Servicing LLC
On June 6, 2018, Strongbridge Biopharma plc (the “Company”) and its subsidiaries, Strongbridge U.S. Inc., Cortendo Cayman Ltd., Strongbridge Ireland Limited and Cortendo AB (publ), entered into a second amendment (the “Loan Amendment”) to the Term Loan Agreement with CRG Servicing LLC, as administrative agent and collateral agent, and the lenders named therein (the “Lenders”), dated as of July 14, 2017, as amended by Amendment 1 to Term Loan Agreement, dated as of January 16, 2018 (the “Term Loan Agreement”).
The primary purposes of the Loan Amendment (as requested by the Company) are to reduce the aggregate commitments under the Term Loan Agreement from $100 million to $95 million and to combine the third and fourth borrowing tranches under the Term Loan Agreement into one final borrowing tranche for up to $10 million (the “Final Tranche”). Under the terms of the Loan Amendment, the Final Tranche borrowing must occur on or before March 19, 2019. The Final Tranche is subject to the Company’s achievement of a certain revenue milestone, which under the Loan Amendment must be satisfied on or prior to December 31, 2018, and satisfaction of a market capitalization condition for the 20 consecutive trading days ending on the trading day immediately prior to the Final Tranche borrowing date (as described in the Term Loan Agreement, as amended by the Loan Amendment).
Pursuant to the terms of the Loan Amendment, if the Company borrows the Final Tranche, it must issue to the Lenders, or their designees, one or more warrants to purchase a number of the Company’s ordinary shares equal to an aggregate of (i) 0.10% of its ordinary shares outstanding following such issuance on a fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at an exercise price equal to 110% of the closing price of the Company’s ordinary shares on the date immediately preceding the Final Tranche borrowing date and (ii) 0.25% of its ordinary shares outstanding following such issuance on a fully diluted basis (inclusive of the ordinary shares underlying all such warrants issued), at an exercise price equal to 140% of the 10-day volume weighted-average price (VWAP) per share of the Company’s ordinary shares of the consecutive 10-trading-day period ending on the trading day prior to the Final Tranche borrowing date.
The foregoing description of the Loan Amendment is not complete and is qualified in its entirety by reference to the full text of the Loan Amendment, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the fiscal year quarter ended June 30, 2018.
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