Quotient Limited entered into an amended agreement with MidCap Financial to increase its existing term credit facility from $15 million to up to $50 million. Quotient and MidCap originally entered into a $15 million term credit facility on December 6, 2013.
New funding of $15 million will be made immediately available to Quotient under the New MidCap Facility for working capital purposes. The remaining $20 million will be made available, subject to certain conditions, following receipt of CE-Marking for MosaiQ™ ($5.0 million) and upon first commercial sale of MosaiQ™ in Europe ($15 million) and will be used to fund working capital requirements following the commercial launch of MosaiQ™. Subject to the satisfaction of the applicable conditions, the initial $5.0 million drawdown must be made prior to January 31, 2017 and the subsequent $15 million drawdown must be made prior to June 30, 2017.
The New MidCap Facility will be repayable in 30 equal installments, commencing on March 1, 2018 (or 24 equal installments commencing on September 1, 2018, if the company achieves CE Mark approvals for the MosaiQTM instrument and blood grouping consumable). Interest will be payable monthly in arrears at an annual rate equivalent to one-month LIBOR plus 6.7%, subject to a LIBOR floor of 2.0%.
The company has also granted an affiliate of MidCap warrants to subscribe for 111,525 new ordinary shares in the Company at an exercise price of $16.14 per ordinary share. Further warrants will be granted to the MidCap affiliate in connection with each subsequent drawdown of funds by the company under the New MidCap Facility for new ordinary shares equal to 6% of the drawdown amount based on the market price of the Company's ordinary shares at the time of grant.
"This incremental funding provided by MidCap bolsters our available capital resources as we continue the commercial scale-up efforts for MosaiQTM," said Paul Cowan, Chairman and Chief Executive Officer of Quotient. "In addition, we see this as a positive, minimally dilutive way to lower our overall cost of capital, while extending our near-term cash runway. We are pleased to again partner with MidCap and thank them for their continued confidence in our business."
Quotient Limited is an established, commercial-stage diagnostics company committed to reducing healthcare costs and improving patient care through the provision of innovative tests within established markets. With an initial focus on blood grouping and serological disease screening, Quotient is developing its proprietary MosaiQTM technology platform to offer a breadth of tests that is unmatched by existing commercially available transfusion diagnostic instrument platforms.
MidCap Financial is a middle market-focused, specialty finance firm that provides senior debt solutions to businesses across all industries.