Item 1.01. Entry into a Material Definitive Agreement.
Second Amendment of SWK Credit Agreement
On
Pursuant to the terms of the
• Interest Rate: Interest is now calculated on the SWK Loans based on 3-month SOFR instead of 3-month LIBOR, such that the SWK Loans now bear interest at an annual rate of the sum of (i) 3-month SOFR, subject to a 1% floor, plus (ii) a margin of 11%, with such interest payable quarterly in arrears. • Capitalization of Interest: The Company's option to capitalize accrued interest (the "PIK Amount") has been extended throughMay 15, 2023 (instead of the previousFebruary 15, 2023 ). • Maturity Date: The final maturity date of the Second Term Loan isMarch 4, 2024 , which is the same as the final maturity date of the Original Term Loan. • Exit Fees: The Company has the option to prepay the Second Term Loan in whole or in part. Upon the repayment of the Second Term Loan (whether a voluntary prepayment, an accelerated repayment or at scheduled maturity), the Company must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid in cash to SWK under the SWK Credit Agreement with respect to the Second Term Loan, but excluding the Third Warrant (defined below)) equal to the outstanding principal amount of the Second Term Loan (inclusive of PIK Amounts) multiplied by: (i) if the repayment occurs on or beforeApril 15, 2023 , 1.18, (ii) if the repayment occurs on or afterApril 16, 2023 but prior toMay 16, 2023 , 1.28667, (iii) if the repayment occurs on or afterMay 16, 2023 but prior toJune 16, 2023 , 1.39334, and (iv) if the repayment occurs on or afterJuly 16, 2023 , 1.5. The Second Amendment did not modify the exit fee applicable to the Original Term Loan. • Minimum Cash Requirement: The Second Amendment revised the liquidity covenant and the Current SWK Credit Agreement now provides that the Company's cash and cash equivalents balance minus the aggregate amount of any accounts payable which are unpaid more than 90 days beyond terms consistent with the Company's practice must not be less than the lesser of (a) the outstanding principal amount of the SWK Loans, or (b)$1.5 million ; provided, however, that such$1.5 million amount shall automatically be increased to$3.0 million on the date that is 14 days following the date, if any, that the Company's Board of Directors determines that discontinuation of the development program for the Company's product candidate known as ACER-801 (osanetant) for the treatment of vasomotor symptoms is warranted based upon a serious adverse event or a lack of efficacy at any dose studied in the results from a completed Phase 2a trial (an "Osanetant Failure Date"). • Amortization: Commencing onMay 15, 2023 , the principal amount of the SWK Loans will amortize at a rate of$1.3 million (previously$650,000 ) payable quarterly; provided, however, that if the Osanetant Failure Date occurs, the principal amount of the SWK Loans will instead amortize on the 15th day of each month thereafter, at a monthly rate of$600,000 , until the Company has issued additional equity or subordinated debt resulting in net cash proceeds of not less than$10.0 million following the Osanetant Failure Date. 2
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In connection with the execution of the Second Amendment, the Company issued to
SWK an additional warrant (the "Third Warrant") to purchase 250,000 shares of
the Company's common stock,
The foregoing description of the
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information required by Item 2.03 relating to the Current SWK Credit Agreement (including, without limitation, as amended by the Second Amendment), the SWK Loans (including, without limitation, as augmented by the Second Term Loan), and the Marathon Convertible Notes (including, without limitation, as amended by the Marathon Amendment Agreement) is contained in Item 1.01 of this Current Report on Form 8-K and incorporated herein by reference.
Item 3.02 Unregistered Sales of
The information required by Item 3.02 relating to the issuance of the Third Warrant is contained in Item 1.01 of this Current Report on Form 8-K and is incorporated herein by reference. The issuance of the Third Warrant to SWK has been made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.
Item 8.01. Other Events.
On
During
Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this Current Report are forward-looking statements. Such statements include statements
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regarding the sufficiency and duration of the Company's cash and cash
equivalents. Such statements are based on the current expectations of the
Company's management and involve risks and uncertainties. Actual results and
performance could differ materially from those projected in the forward-looking
statements as a result of many factors, including without limitation, risks and
uncertainties associated with the ability to project future cash utilization and
reserves needed for contingent future liabilities and business operations, the
availability of sufficient resources to fund the Company's various product
candidate development programs and to meet the Company's business objectives and
operational requirements, the fact that the results of earlier studies and
trials may not be predictive of future clinical trial results, risks related to
the drug development and regulatory approval processes, including the timing and
requirements of regulatory actions, and the risks and uncertainties set forth in
the Company's filings with the
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 Credit Agreement datedMarch 4, 2022 , amongAcer Therapeutics Inc. , the lenders party thereto andSWK Funding LLC , as the agent, sole lead arranger and sole bookrunner (incorporated by reference to the Registrant's Current Report on Form 8-K filed onMarch 7, 2022 ). 10.2 Amendment to Credit Agreement datedAugust 19, 2022 , amongAcer Therapeutics Inc. , the lenders party thereto andSWK Funding LLC , as the agent, sole lead arranger and sole bookrunner (incorporated by reference to the Registrant's Current Report on Form 8-K filed onAugust 23, 2022 ). 10.3 Second Amendment to Credit Agreement datedJanuary 30, 2023 , amongAcer Therapeutics Inc. , the lenders party thereto andSWK Funding LLC , as the agent, sole lead arranger and sole bookrunner. 10.4 Warrant issued onJanuary 30, 2023 , by the Company to SWKFunding LLC pursuant to the Second Amendment to Credit Agreement datedJanuary 30, 2023 , amongAcer Therapeutics Inc. , the lenders party thereto and SWK funding LLC, as the agent, sole lead arranger and sole bookrunner. 10.5 Secured Convertible Note Purchase Agreement datedMarch 4, 2022 , betweenAcer Therapeutics Inc. ,MAM Aardvark, LLC andMarathon Healthcare Finance Fund, L.P. (incorporated by reference to the Registrant's Current Report on Form 8-K filed onMarch 7, 2022 ). 10.6 Form of Secured Convertible Note issuable byAcer Therapeutics Inc. toMAM Aardvark, LLC andMarathon Healthcare Finance Fund, L.P. pursuant to the Secured Convertible Note Purchase Agreement datedMarch 4, 2022 , betweenAcer Therapeutics Inc. andMAM Aardvark, LLC andMarathon Healthcare Finance Fund, L.P. (incorporated by reference to the Registrant's Current Report on Form 8-K filed onMarch 7, 2022 ). 10.7 Amendment Agreement datedJanuary 30, 2023 , with respect to Secured Convertible Note Purchase Agreement betweenAcer Therapeutics Inc. ,MAM Aardvark, LLC andMarathon Healthcare Finance Fund, L.P. 10.8 Credit Agreement, dated as ofMarch 4, 2022 , amongAcer Therapeutics Inc. , the Lenders party thereto andMAM Aardvark, LLC , not individually, but solely in its capacity as administrative and collateral agent for the Lenders (incorporated by reference to the Registrant's Current Report on Form 8-K filed onMarch 7, 2022 ). 10.9 Termination Agreement dated as ofJanuary 30, 2023 amongAcer Therapeutics Inc. , the Lenders party thereto andMAM Aardvark, LLC , not individually, but solely in its capacity as administrative and collateral agent for the Lenders. 104 Cover page interactive data file (embedded within the inline XBRL document). 5
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