What changed in this filing

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Item 5. Other Information

2021-08-10 compared with 2021-05-11 · 43 added, 11 removed, 23 unchanged (70% of the section changed)

Other Information.

Not applicable.

New Credit Facility

On August 9, 2021 (the “Closing Date”), we entered into a Credit Agreement (the “New Credit Facility”) with Blackstone Alternative Credit Advisors LP (“Blackstone”) and the other lenders party thereto from time to time and Wilmington Trust, National Association, as administrative agent (the “Administrative Agent”), that provides for (i) a senior secured term loan facility in an aggregate original principal amount of $200.0 million (the “Initial Term Loan”) and (b) a senior secured delayed draw term loan facility in an

aggregate principal amount up to $100.0 million (the “DDTL” and, together with the Initial Term Loans, the “Loans”).

The Loans bear interest at a per annum rate equal to LIBOR (subject to a 1.00% floor) plus 6.50%, which shall increase by an additional 2.00% on all past due obligations if we fail to pay any amount when due or following any acceleration of the Loans, and are scheduled to mature on August 9, 2026 (the “Maturity Date”), which is the fifth anniversary of the Closing Date.

In addition, on the Closing Date we paid an upfront fee of 2.0% of the aggregate principal amount of the Initial Term Loan and an upfront fee of 1.0% of the aggregate principal amount of the DDTL.

We also are required to pay at the time of funding of any portion of the DDTL an upfront fee of 1.0% of the aggregate principal amount being funded.

We are required to make quarterly interest payments until the Maturity Date.

We are also required to make principal payments of the Initial Term Loan and of the funded principal amount of the DDTL on the last day of each quarter.

Quarterly principal payments of the Initial Term Loan will commence with the quarter ending December 31, 2021, in an amount equal to $500,000 per quarter (and increasing to $5,000,000 per quarter commencing with the quarter ending March 31, 2024).

Quarterly principal payments of the funded principal amount of the DDTL will commence with the quarter ending after the initial funding of any portion of the DDTL, in an amount equal to 0.25% (and increasing to 2.50% commencing with the quarter ending March 31, 2024) of the original principal amount of the DDTL funded prior to such principal payment.

Quarterly principal payments of the Initial Term Loans and the DDTL will continue until the Maturity Date, on which date all outstanding Loans and other amounts owed under the New Credit Facility will be required to be paid in full.

Subject to certain exceptions, we are required to make mandatory prepayments of the Loans, with the proceeds of asset sales, casualty and condemnation events and prohibited debt issuances.

In addition, we may make voluntary prepayments of the Loans, in whole or in part.

All voluntary prepayments and mandatory prepayments (other than mandatory prepayments with the proceeds of asset sales and casualty or condemnation events) of the Loans are subject to the payment of prepayment premiums as follows:

(i) if prepayment occurs on or before the second anniversary of the Closing Date, an amount equal to 2.0% of the principal prepaid plus a “make-whole” amount in respect of any such principal payments (whether mandatory or voluntary) described in this clause (i), in an amount equal to the interest that would have accrued through the second anniversary of the Closing Date but for such principal repayment, (ii) if prepayment occurs after the second anniversary of the Closing Date but on or before the third anniversary of the Closing Date, an amount equal to 2.0% of the principal prepaid, (iii) if prepayment occurs after the third anniversary of the Closing Date but on or before the fourth anniversary of the Closing Date, an amount equal to 1.0% of the principal prepaid, and (iv) if prepayment occurs after the fourth anniversary of the Closing Date, no prepayment premium is due.

The Loans are and will be guaranteed by our subsidiary Harmony Biosciences, LLC and certain of our future subsidiaries that are required to become a party thereto as guarantors (collectively, the “Guarantors”).

Our obligations under the New Credit Facility and the guarantee of such obligations are secured by a pledge of substantially all of our assets and will be secured by a pledge of substantially all of the assets of the Guarantors pursuant to the terms of the Pledge and Security Agreement dated as of the Closing Date by and among us, the Administrative Agent and the Guarantors from time to time party thereto (the “Security Agreement”).

The New Credit Facility contains affirmative and negative covenants customary for financings of this type, including limitations on our and our subsidiaries’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions and enter into affiliate transactions, in each case, subject to certain exceptions.

In addition, the New Credit Facility contains a financial covenant that requires us to maintain at all times cash and cash equivalents in certain deposit accounts in an amount at least equal to $10.0 million.

The New Credit Facility also contains representations and warranties of us and of the Guarantors customary for financings of this type.

Such representations and warranties (i) are intended not as statements of fact, but rather as a way of allocating the risk between the parties to the New Credit Facility and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by our stockholders or other investors.

The foregoing summary of the New Credit Facility is included with this filing only to provide investors with information regarding the terms of the transaction, and not to provide stockholders or other investors with any other factual information regarding us.

Stockholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of us or any of our subsidiaries or affiliates.

Moreover, information concerning the subject matter of the representations and warranties may change after the date of the New Credit Facility, which subsequent information may or may not be fully reflected in public disclosures.

The New Credit Facility also includes events of default customary for financings of this type, in certain cases subject to customary periods to cure, following which the Administrative Agent may accelerate all amounts outstanding under the Loan.

Additionally, in connection with the New Credit Facility, on the Closing Date, we sold to certain of the lenders under the New Credit Facility an aggregate of 1,048,951 shares of our common stock, par value $0.00001 per share, for an aggregate cash consideration of $30.0 million, or $28.60 per share.

This sale did not involve a public offering and was therefore exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D thereunder as a transaction not involving any public offering.

Termination of the OrbiMed Credit Agreement

On January 9, 2020, we entered into a credit agreement with OrbiMed Royalty & Credit Opportunities, LP for an aggregate amount of $200 million (the “OrbiMed Loan”), which was scheduled to mature in January 2026.

Borrowings under the OrbiMed Loan were collateralized by all of the Company’s assets, excluding the intellectual property licensed through the License Agreement.

The OrbiMed Loan had an interest rate equal to the sum of (i) the greater of (a) 1-month LIBOR or (b) 2.00% per annum, plus (ii) 11.00% per annum, paid in cash monthly in arrears on the last day of each month starting in January 2020.

The OrbiMed Loan was repaid in full and all commitments thereunder were terminated on August 9, 2021 in connection with the execution of the New Credit Facility .

In connection with the payment of the OrbiMed Loan, we paid an exit fee of 7.0% and a repayment premium of 4.0% of the principal amount of the OrbiMed Loan repaid.

The foregoing descriptions of the New Credit Facility and the Security Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of each of the New Credit Facility and the Security Agreement which the Company has filed as exhibits to this Quarterly Report.

Exhibit Description

4 unchanged sentences

August 21, 2020

Confidential Separation Agreement and General Release, between Harmony Biosciences, LLC and Susan L.

Drexler, dated March 4, 2021.

March 10, 2021

Employment Agreement, dated March 4, 2021, between Harmony Biosciences, LLC and Sandip Kapadia.

March 15, 2021

Promotion Increase Award Letter to Jeffrey Dierks, dated June 9, 2021.

Credit Agreement, dated as of August 9, 2021, among Harmony Biosciences Holdings, Inc., as Borrower, Harmony Biosciences, LLC, as Guarantor, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Wilmington Trust, National Association, as Administrative Agent.

Pledge and Security Agreement, dated as of August 9, 2021, among Harmony Biosciences Holdings, Inc.

and Harmony Biosciences, LLC, as Grantors, the other Grantors from time to time party thereto and Wilmington Trust, National Association, as Administrative Agent.

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The following financial statements from the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2021 formatted in Inline XBRL:

The following financial statements from the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2021 formatted in Inline XBRL:

(i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) and (vi) Notes to Financial Statements, tagged as blocks of text and including detailed tags.

Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith.

Furnished herewith.

This certification is deemed furnished, and not filed, with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Harmony Biosciences Holdings,

This certification is deemed furnished, and not filed, with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Harmony Biosciences Holdings, Inc.

under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

Indicates management contract or compensatory plan.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

1 unchanged sentence

President, Chief Executive Officer and Director (principal executive officer)

May 11 , 2021

August 10, 2021

/s/ Sandip Kapadia

1 unchanged sentence

Chief Financial Officer (principal financial officer)

May 11 , 2021

August 10, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information