Item 5. Other Information
Item 5. Other Information.
Barings Credit Facility
On August 2, 2023, or the Closing Date, we entered into a credit and security agreement, or the Barings Credit Agreement, with Barings Finance LLC, or Barings, as administrative agent, and the lenders party thereto, providing for a secured term loan facility for us, which we refer to as the Barings Credit Facility, in the aggregate principal amount of $82.5 million, which we refer to as the Total Credit Facility Amount. We borrowed the full amount of $82.5 million at closing and received proceeds of $77.8 million, after the application of a discount and fees. In connection with our entry into the Barings Credit Agreement, we paid an aggregate of $26.2 million in August 2023 to MidCap Financial Trust, or MidCap, and the other lenders party to the Fourth Amended and Restated Credit and Security Agreement, dated as of June 4, 2021, as amended, or the MidCap Credit Agreement. Our payment to MidCap and the other lenders under the MidCap Credit Agreement was comprised of $25.0 million in principal and interest accrued thereunder and $1.2 million in exit and prepayment fees in satisfaction of our obligations thereunder. Upon the payment, all liens and security interests securing the indebtedness under the MidCap Credit Agreement were released.
Our indebtedness under the Barings Credit Facility matures on the earlier to occur of (i) the six-year anniversary of the Closing Date and (ii) the date that is 91 days prior to the maturity date for the $37.5 million of unsecured senior subordinated convertible notes, or the Convertible Notes, that we issued in March 2019. We refer to such earlier date as the Maturity Date. We are obligated to make interest payments on our indebtedness under the Barings Credit Facility on a monthly basis, commencing on the Closing Date, to pay annual administrative fees of $0.02 million, and to pay, on the Maturity Date, any principal and accrued interest that remains outstanding as of such date. In connection with our borrowing of the full amount under the Barings Credit Facility, we also incurred an upfront fee, paid in the form of an original issue discount, equal to approximately $2.5 million.
Indebtedness under the Barings Credit Facility incurs interest at a Secured Overnight Financing Rate-based rate, subject to a minimum 1.50% floor, plus 6.75%. We may prepay funds drawn under the Barings Credit Facility at any
41
Table of Contents
time, in accordance with the terms of the Barings Credit Agreement, subject to prepayment fees for funds prepaid (i) on or before the one-year anniversary of the Closing Date, in an amount equal to the interest that would have accrued on such prepaid funds but for the prepayment, at the interest rate in effect as of the such prepayment date, discounted to its present value; (ii) on or before the two-year anniversary of the Closing Date, in an amount equal to 11.3% of principal prepaid; (iii) after the two-year but on or before the three-year anniversary of the Closing Date, in an amount equal to 5.6% of principal prepaid; and (iv) after the three-year anniversary but on or prior to the four-year anniversary of the Closing Date, in an amount equal to 2.8% of principal prepaid. No prepayment fees are required for funds prepaid after the four-year anniversary of the Closing Date.
In addition, we are obligated to pay a fee, which we refer to as the Royalty Fee, in an amount equal to the Total Credit Facility Amount, which amount shall be reduced by the total amount of interest and principal prepayment fees paid under the Barings Credit Agreement. We are required to pay the Royalty Fee in installments to Barings, for the benefit of the lenders, on a quarterly basis in an amount equal to three and one-half percent (3.5%) of the net sales of DEXTENZA occurring during such quarter, subject to the terms, conditions and limitations specified in the Barings Credit Agreement, until the Royalty Fee is paid in full. The Royalty Fee is due and payable upon a change of control of the company. In the event we complete a change of control transaction on or prior to the twelve-month anniversary of the Closing Date, the Royalty Fee is subject to a reduction to an amount that is equal to (i) 20% of the Total Credit Facility Amount, in the event that a signed letter of intent evidencing such change of control transaction was entered into by us on or prior to the date that is six months after the Closing Date and (ii) 30% of the Total Credit Facility Amount, in the event that a signed letter of intent evidencing such change of control transaction was entered into by us after the date that is six months, but before the date that is twelve months, after the Closing Date. We may, at our option, prepay any or all of the Royalty Fee at any time without penalty.
In connection with the Barings Credit Agreement, we granted the lenders a first-priority security interest in all of our assets, including our intellectual property, subject to certain agreed-upon exceptions. The Barings Credit Agreement includes negative covenants restricting us from making payments to the holders of the Convertible Notes except in connection with a proposed conversion to equity and with respect to certain permitted expenses and requiring us to maintain a minimum liquidity amount of $20.0 million. The Barings Credit Agreement also includes customary affirmative and negative covenants including limitations on dispositions, mergers or acquisitions; incurring indebtedness, liens or encumbrances; paying dividends or making distributions; making certain investments; and engaging in certain other business transactions. Our obligations under the Barings Credit Agreement are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in our business, operations or financial or other condition or a breach or default in our obligations under the Convertible Notes. At the election of Barings, the Barings Credit Agreement provides that, following the occurrence and during the continuance of an event of default as defined in the Barings Credit Agreement, our indebtedness under the Barings Credit Facility may bear an interest rate that is 4.00% above the rate that is otherwise applicable.
On the Closing Date, in connection with our entry into the Barings Credit Agreement and establishment of the Barings Credit Facility, we and the holders of the Convertible Notes agreed to amend the Convertible Notes and the accompanying Note Purchase Agreement to, among other things, extend the maturity date of the Convertible Notes until the date that is 91 days following the Maturity Date.
DGCL 204 Ratification
On August 6, 2023, our board of directors adopted resolutions, or the Resolutions, ratifying issuances of certain shares of our common stock to employees pursuant to our 2014 Employee Stock Purchase Plan, or the Plan, pursuant to Section 204 of the General Corporation Law of the State of Delaware, or the Ratification, after it determined that the issuances may not have been duly authorized and effectuated in accordance with the Plan or duly authorized in accordance with Section 152 of the General Corporation Law of the State of Delaware as issuances of shares outside the Plan, or collectively, the Failure of Authorization. The Ratification became effective upon the adoption of the Resolutions on August 6, 2023, or the Validation Effective Time. The following share issuances have been ratified pursuant to the Resolutions: (i) 1,329 shares issued on June 30, 2015, (ii) 1,571 shares issued on December 31, 2015, (iii) 4,182 shares issued on June 30, 2016, (iv) 743 shares issued on December 30, 2016, (v) 525 shares issued on June 30, 2017, (vi) 6,870 shares issued on December 29, 2017, (vii) 930 shares issued on June 29, 2018, (viii) 11,648 shares issued on December 31, 2018, (ix) 13,154 shares issued on June 28, 2019, (x) 2,485 shares issued on December 31, 2019, (xi) 15,290 shares issued on June 30, 2020, (xii) 3,314 shares issued on December 31, 2020, (xiii) 10,798 shares issued on June 30, 2021, (xiv) 30,475 shares issued on December 31, 2021, (xv) 48,230 shares issued on June 30, 2022,
42
Table of Contents
and (xvi) 36,790 shares issued on December 30, 2022. Any claim that the defective corporate acts or putative stock ratified in the Resolutions are void or voidable due to the Failure of Authorization, or any claim that the Court of Chancery of the State of Delaware should declare in its discretion that the Ratification not be effective or be effective only on certain conditions, must be brought within 120 days from the later of the Validation Effective Time or the date of the filing of this Quarterly Report on Form 10-Q.
Item 6. Exhibits .
The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the following Exhibit Index.
43
Table of Contents
Exhibit Index
Incorporated by Reference
Exhibit
Number
Description of Exhibit
Form
File Number
Date of Filing
Exhibit Number
Filed Herewith
10.1
Amendment No. 2 to Fourth Amended and Restated Credit and Security Agreement, dated May 4, 2023, by and among MidCap Financial Trust, as administrative agent, the Registrant, and the Lenders listed therein .
X
10.2
2021 Stock Incentive Plan, as amended
X
10.3
Third Amendment to Lease, by and between the Registrant and Cobalt PropCo 2020, LLC, dated June 30, 2023.
8-K
001-36554
7/7/2023
10.1
31.1
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document)
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Database
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X
44
Table of Contents
Incorporated by Reference
Exhibit
Number
Description of Exhibit
Form
File Number
Date of Filing
Exhibit Number
Filed Herewith
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
X
104
The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL and contained in Exhibit 101
X
45
Table of Contents
SIGNATURES
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.
OCULAR THERAPEUTIX, INC.
Date: August 7, 2023
By:
/s/ Donald Notman
Donald Notman
Chief Financial Officer
(Principal Financial and Accounting Officer)
46
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.