ONWARD Medical, focussed on spinal cord stimulation therapies to restore movement, function, and independence in people with spinal cord injury, signed a loan agreement in the amount of up to €52.5 million with U.S.-based lender Runway Growth Capital LLC. The loan will help to fund upcoming milestones including the expected launch of a first therapy later this year.
ONWARD ARC Therapy is targeted, programmed spinal cord stimulation designed to be delivered by the Company’s external ARC-EX or implantable ARC-IM platforms. ARC Therapy can also be delivered by the Company’s ARC-BCI platform, which pairs the ARC-IM System with brain-computer interface technology to restore movement after spinal cord injury with thought-driven control.
The loan will be used to (i) repay all of the Company’s outstanding debt, (ii) fund the Company’s upcoming commercial and clinical activities, and (iii) for working capital and general corporate purposes.
“ONWARD is pleased to enter this long-term relationship with one of the top U.S. lenders providing growth capital to innovative life science companies,” said ONWARD Medical CEO Dave Marver. “This relationship will diversify our capital structure and help to fund many of our upcoming milestones, including expected launch of our ARC-EX System later this year and commencement of our pivotal study for ARC-IM, called Empower BP. We look forward to working closely with Runway to provide fuel to our effort to bring solutions to the profound unmet needs of people with spinal cord injury.”
The facility is divided into five individual credit tranches. The first initial credit tranche of €16.0 million will be available upon signing of the Loan Agreement and will be drawn down immediately. Three subsequent credit tranches of €14.0 million, up to €5.0 million and up to €7.5 million will be available to be drawn by the Company until March 31, 2025, July 31, 2026 and January 31, 2027 respectively, in each case subject to the Company’s achievement of certain milestones under the Loan Agreement. The fifth credit tranche of up to €10.0 million is uncommitted and available in the first quarter of 2027 upon the sole discretion of the Lender.
The loan documents provide for a number of affirmative and negative covenants by the Company customary for financings of this type, including financial covenants relating to revenue, earnings before interest taxes deprecition and amortization (EBITDA) and minimum liquidity targets. The loans advanced under the Loan Agreement will be secured by a security interest in substantially all of the assets of the ONWARD Medical, N.V. and its subsidiaries.
In addition, upon signing of the debt financing the Company will issue to the Lender warrants which will entitle the Lender to purchase ordinary shares in the capital of the Company at an exercise price per newly issued share calculated on the basis of the lowest 30 day volume-weighted average price (VWAP) between April 9, 2024 and the signing of the debt financing.
(Press release / SK)
Pcture: Pixabay - AI generated
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