Agile Therapeutics, Inc., a women's health specialty pharmaceutical company focused on the development and commercialization of new prescription contraceptive products, announced that it has entered into a loan and security agreement with Hercules Technology Growth Capital, Inc. for a term loan of up to $25.0 million.
"This strategic debt refinancing, coupled with our recently announced equity financing that resulted in $20 million in gross proceeds, increases our balance sheet strength and ensures that we are well positioned for executing on our strategy," stated Al Altomari, President and Chief Executive Officer of Agile. Altomari continued, "We expect that our existing estimated cash on hand as of December 31, 2015, the net proceeds from our recent equity offering, and the net proceeds and interest-only period associated with the first tranche of our debt facility will allow us to fund our operations through the end of 2016. We are pleased to have the support from Hercules, which is a highly recognized leader in growth financing."
A first tranche of $16.5 million was funded upon execution of the loan agreement, approximately $15.5 million of which will be used to repay Agile's existing term loan facility and the remainder, after closing costs, will provide additional working capital for general corporate purposes. Agile is permitted to make interest only payments on the loan until July 1, 2016, which period may be extended under certain circumstances. Under the terms of the loan agreement, Agile may, but is not obligated to, draw an additional tranche of up to $8.5 million prior to July 1, 2016, subject to the achievement of certain clinical milestones, which may be extended to December 31, 2016 under certain circumstances.
In connection with the loan agreement, Agile issued Hercules a warrant to purchase 180,274 shares of Agile common stock at an exercise price of $5.89 per share and granted Hercules the right to participate in future equity financings in an amount up to $2 million while the loan and warrant are outstanding.
Armentum Partners served as advisor to the Company for this financing. Armentum has advised on more than 40 debt or royalty transactions in the past 12 months representing roughly $1 billion in committed capital.
Hercules Technology Growth Capital, Inc. is a leading specialty finance company focused on providing senior secured loans to venture capital-backed companies in technology-related industries, including technology, biotechnology, life science, and energy and renewables technology, at all stages of development. Since inception (December 2003), Hercules has committed more than $4.6 billion to over 300 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing.