UPDATE ON INVESTMENT

BioPharma Credit PLC

08 June 2023

 

8 June 2023

BIOPHARMA CREDIT PLC

UPDATE ON INVESTMENT

BioPharma Credit PLC (LSE: BPCR) notes the filing of a Form 6-K made yesterday by LumiraDx Limited ("LumiraDx") which discloses an amendment to the loan agreement entered into with BioPharma Credit PLC, BPCR Limited Partnership, and BioPharma Credit Investments V (Master) LP, which is copied below in part for convenience and can be found in its entirety at: LumiraDx Form 6-K Report:

"EXPLANATORY NOTE

On June 7, 2023, LumiraDx Investment Limited, one of the subsidiaries of LumiraDx Limited (the "Company"), entered into a sixth amendment to that certain Loan Agreement, dated March 23, 2021 (as amended from time to time, the "Loan Agreement"), with BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership, as lenders, and BioPharma Credit PLC (collectively, "Pharmakon"), as collateral agent, to provide for, among other things, revisions to the minimum net sales and the minimum liquidity covenants in the Loan Agreement and a two year extension to the term loan maturity date (the "Sixth Amendment").

Pursuant to the Sixth Amendment, if the Company completes a Sixth Amendment Qualifying Financing (as defined in the Sixth Amendment), the Loan Agreement shall be amended as follows (i) the term loan maturity date will be extended to March 29, 2026, (ii) the minimum net sales covenant in the Loan Agreement, will be reset to be tested on a quarterly basis at the end of each fiscal quarter with respect to each trailing three-month period, as described in the Sixth Amendment, and (iii) the minimum liquidity covenant in the Loan Agreement will be reset to be tested daily, as described in the Sixth Amendment. There can be no assurance that the Company will be able to meet the minimum net sales and minimum liquidity thresholds that have been provided for in the Sixth Amendment.

In exchange for the amendments described above, the Company has agreed to, among other things, (a) pay additional payment-in-kind interest with respect to amounts outstanding under the Loan Agreement in an amount equal to three month term SOFR as applicable from time to time; (b) if the Company completes a Sixth Amendment Qualifying Financing, comply with new financial covenants with respect to the maximum adjusted operating expenses and the minimum adjusted operating income/(loss) of the Company, each to be tested quarterly at the end of each fiscal quarter with respect to each trailing three-month period (each as more particularly described in the Sixth Amendment); (c) amend or replace that certain Warrant Instrument, dated September 28, 2021, among the Company, BioPharma Credit PLC and BioPharma Credit Investments V (Master) LP, as amended from time to time, to among other things reflect the impact of the Sixth Amendment Qualifying Financing (up to a maximum number of 17,500,000 warrants); and (d) amend or restructure certain of its other outstanding contractual obligations as promptly as practicable and in any event not later than thirty days following the effective date of a Sixth Amendment Qualifying Financing.

The Company has also agreed to, among other things, permit the Required Lenders (as defined in the Loan Agreement) to designate one individual to serve on the Company's Board of Directors (following completion of the Sixth Amendment Qualifying Financing) and one individual to serve as an observer or (following completion of the Sixth Amendment Qualifying Financing) two individuals to serve as observers, with the authority to attend and receive materials relating to (but not vote at) meetings of the Company's Board of Directors. Each such appointment shall be terminated immediately upon the payment in full of all of the Company's obligations under the Loan Agreement, in each case on the basis more particularly described in the Sixth Amendment.

The foregoing description of the Sixth Amendment does not purport to be complete and is qualified in its entirety by reference to the Sixth Amendment which is attached to this Form 6-K as Exhibit 4.1.

This report on Form 6-K, including Exhibit 4.1 hereto, shall be deemed to be incorporated by reference into the Company's registration statements on Form S-8 (File No. 333-259874, File No. 333-264611 and File No. 333-271538), and the registration statements on Form F‑3 (File No. 333-264609 and File No. 333-271624), and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently furnished."

Pharmakon Advisors, LP is actively monitoring the referenced "Sixth Amendment Qualifying Financing" which is defined as LumiraDx raising "gross proceeds in an aggregate amount equal to or greater than $75,000,000 (or its equivalent in another currency or currencies) through the issue of Qualifying Equity Interests" in the Sixth Amendment, and will provide any updates in due course.

Enquiries

Buchanan

David Rydell / Mark Court / Jamie Hooper / Henry Wilson

[phone]

[e-mail]

Notes to Editors

BioPharma Credit PLC is London's only specialist debt investor to the life sciences industry and joined the LSE in March 2017. BioPharma Credit PLC seeks to provide long-term shareholder returns, principally in the form of sustainable income distributions from exposure to the life sciences industry. BioPharma Credit PLC seeks to achieve this objective primarily through investments in debt assets secured by royalties or other cash flows derived from the sales of approved life sciences products.

 

END