Universal Biosensors, Inc.
Notes to Consolidated Financial Statements
(for the years ended December 31, 2019 and 2018)
Athyrium Credit Agreement
On December 19, 2013 (Closing Date), UBI and its wholly owned subsidiary, UBS (together UBI and UBS, the Transaction
Parties) entered into a credit agreement with Athyrium Opportunities Fund (A) LP (Athyrium A), as administrative agent (the Administrative Agent) and as a lender, and Athyrium Opportunities Fund (B) LP
(Athyrium B) as a lender (Athyrium A and Athyrium B together with any other lenders party thereto from time to time, the Lenders) for a secured term loan of up to US$25,000,000, which was amended on January 30, 2015
(Credit Agreement). Of this amount, US$15,000,000 had been drawn at December 31, 2013, with a further US$10,000,000 available to be drawn down on or before July 31, 2015 if UBS satisfied certain conditions precedent relating to
The credit agreement was amended again on December 29, 2017 (Amendment). Subject to the terms of the
Amendment, the Amendment modified the Credit Agreement to (i) extend the maturity date to July 1, 2019 (Maturity Date), (ii) add the Borrowers wholly owned subsidiary, Hemostasis Reference Laboratory, Inc.
(HRL), as a guarantor of the Borrowers obligations under the Credit Agreement and (iii) subject to the prior written consent of the Lenders in their sole discretion, permit UBI to repurchase shares in an aggregate amount up to
US$2,000,000 within 12 months after the date Lenders provide any such consent. In connection with the Amendment, UBI agreed to pay a fee of US$200,000 to the Lenders and to reimburse certain expenses of the Lenders incurred in connection with the
Amendment. The fee of US$200,000 was paid in January 2018.
The term loan was voluntary prepaid in November 2018 and a Deed of Release was
executed in December 2018 releasing all the Transaction Parties securities and obligations under the term loan.
The term loan bore
interest at 10.5% per annum payable in cash quarterly in arrears over the term, and as otherwise described in the Credit Agreement. A default interest rate of 13% per annum applied during the existence of a default under the Credit Agreement. The
term loan under the Credit Agreement was secured by substantially all of UBI, UBS and HRLs assets. UBI and HRL (together with any future subsidiaries) guaranteed all of UBSs obligations under the term loan.
Voluntary prepayments of the term loans were not permitted prior to the second anniversary of the Closing Date, except in the event of a
change of control of a Transaction Party. After the second anniversary, UBS could make voluntary repayments in minimum principal amounts of US$2,500,000 together with interest, plus a prepayment premium commencing at 15% of the principal of such
prepayment due and payable on the applicable date and reducing pro-rata on a monthly basis until the Maturity Date. Since UBS repaid the loan prior to its Maturity Date, it paid a prepayment premium of
As further described below, pursuant to the Credit Agreement, UBI issued to the Lenders warrants entitling the holder to
purchase up to an aggregate total of 4,500,000 shares of UBIs common stock in the form of CDIs at a price of A$1.00 per share (the Exercise Price), which represents a 117% premium over the closing price of UBIs common stock
on December 19, 2013. The warrants are immediately exercisable and have a term of seven years.
Pursuant to the Credit Agreement, UBI issued to the Lenders warrants entitling the holder to purchase up to an aggregate total of 4,500,000
shares of UBIs common stock in the form of CDIs at a price of A$1.00 per share (the Exercise Price), which represents a 117% premium over the closing price of UBIs common stock on December 19, 2013. The warrants are
immediately exercisable and have a term of seven years.
The warrants may be exercised at any time until December 19, 2020, in whole
or in part in minimum multiples of 500,000 shares of common stock. The holder of the warrants can pay the Exercise Price in cash or it has the right to pay all or a portion of the Exercise Price by making a cashless exercise, therefore reducing the
number of shares of common stock the holder would otherwise be issued.
The warrant is subject to adjustments in the event of certain
issuances by UBI, such as bonus issues, pro rata (rights) issues and reorganizations (e.g. consolidation, subdivision).
assessed that the warrants are not liabilities within scope of ASC 480-10-25. The warrants are legally detachable from the loan and separately exercisable and as such
meet the definition of a freestanding derivative instrument pursuant to ASC 815.