TORONTO, Dec. 13, 2021 (GLOBE NEWSWIRE) — Acerus Pharmaceuticals Corporation (the “Company” or “Acerus”) (TSX:ASP; OTCQB:ASPCF) today announced that it has entered into an amending agreement with First Generation Capital Inc. (“First Generation”), a company affiliated with the Chairman of the Board of Directors of Acerus1, to increase the existing subordinated secured loan facility (the “Loan Facility”) from US$15 million to US$25 million. This increase will be made available to the Company by way of one or more advances under a secured grid promissory note with First Generation provided that any such advance will be made before February 1, 2022.
The Loan Facility is subordinated to the senior facility with SWK Funding LLC (“SWK”) and bears interest at a rate of eight percent (8%) per annum. Subject to the terms of the subordination and intercreditor agreement between First Generation and SWK, the Loan Facility is repayable in full on December 31, 2024, with cash payments of interest and/or principal subject to certain exceptions related to the Company’s market capitalization and the outstanding principal amount of the senior facility with SWK; the Loan Facility can be prepaid in full or in part without penalty following repayment in full of indebtedness owed to SWK. The proceeds from the Loan Facility will be used for ongoing general working capital.
In addition to the increase in the Loan Facility, SWK has consented to temporarily amend their facility to reduce the minimum Consolidated Unencumbered Liquid Asset (generally defined as cash adjusted for certain accounts receivable and payable) covenant from US$2 million to US$250,000 until February 1, 2022.
“While the Company continues to execute on a strategy that emphasizes expanding NATESTO® access in the United States, we appreciate the flexibility of First Generation in providing funds to ensure such plans proceed unhindered,” said Ed Gudaitis, President and Chief Executive Officer of Acerus. “This financing, and the success of our rollout, bolster the Company’s outlook as we turn the corner on 2022.”
In light of First Generation’s relationship to the Chairman of the Board of Directors of Acerus, the independent members of the Board of Directors, led by the Lead Independent Director, separately met to consider and discuss the amendment to the Loan Facility. Following the review of such independent members of the Board of Directors, it was unanimously determined that the entering into of the amendment to the Loan Facility was in the best interests of Acerus.
Acerus Pharmaceuticals Corporation is a Canadian-based specialty pharmaceutical company focused on the commercialization and development of innovative prescription products that improve patient experience, with a primary focus in the field of men’s health. The Company commercializes its products via its own salesforce in the United States and Canada, and through a global network of licensed distributors in other territories.
Acerus’ shares trade on TSX under the symbol ASP and on OTCQB under the symbol ASPCF. For more information, visit www.aceruspharma.com and follow us on Twitter and LinkedIn.
Notice regarding forward-looking statements
Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties, including with respect to the use of proceeds of the Loan Facility, the anticipated benefits of the Loan Facility and the Company’s ability to meet its obligations under the Loan Facility, and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 10, 2021 that is available on www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
(1) A material change report was not filed at least 21 days prior to the entering into of the amendment to the Loan Facility from First Generation as the terms and conditions of such arrangements were not yet finalized at such time.
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