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Marrone Bio Innovations, Inc. announces comprehensive financing and debt restructuring transaction
Dec. 19, 2017
Pro-Farm Group - Formerly Marrone Bio Innovations
United StatesFollow
United States
Under the terms of the Purchase Agreement, the Buyers have agreed to purchase an aggregate of $30.0 million of units (the “Units”), inclusive of funds being advanced by an affiliate of Ospraie as bridge financing under a convertible promissory note. Each of the 30,666,667 Units being purchased by Ospraie will consist of one share of the Company’s common stock, par value $0.00001 per share and a warrant to purchase one share of Common Stock for $1.00 per share. Each of the 13,333,334 Units being purchased by the other Buyers will consist of one share of Common Stock and a warrant to purchase 0.8 shares of Common Stock for $1.00 per share.
The closing of the transactions contemplated by the Purchase Agreement is anticipated to occur in February 2018, subject to satisfaction of various conditions, including approval by the Company’s stockholders in accordance with applicable requirements of The Nasdaq Capital Market at the Company’s 2017 Annual Meeting of Stockholders, which the Company intends to hold in January 2018.
Concurrently with its entry into the Purchase Agreement, the Company has also entered into the following debt refinancing transactions:
- An amendment to the senior secured promissory notes (the “Waddell Notes”) issued and sold to Ivy Science & Technology Fund, Waddell & Reed Advisors Science & Technology Fund and Ivy VIP Science & Technology (collectively, “Waddell”), which provides for the conversion, at the Closing, of $35,000,000 aggregate principal amount of the Waddell Notes into an aggregate of 20,000,000 shares of Common Stock, representing a conversion rate of $1.75 per share, and warrants to purchase 4,000,000 shares of Common Stock for $1.25 per share; and
- An amendment to the Company’s loan agreement with Gordon Snyder (the “Snyder Loan Agreement”), in his capacity as administrative agent to the lenders under such agreement, which provides for the conversion, at the Closing, of $10,000,000 aggregate principal amount of indebtedness currently outstanding under the Snyder Loan Agreement to an aggregate of 5,714,285 shares of Common Stock, representing a conversion rate of $1.75 per share, and warrants to purchase 1,142,856 shares of Common Stock for $1.25 per share.
In addition to the above transactions, as of December 18, 2017, Dwight W. Anderson, the managing member of Ospraie, has funded $3.5 million under his previously announced convertible promissory note with the Company (the “Ospraie Note”), which, together with the remaining $2.5 million that Mr. Anderson may fund under the Ospraie Note, will convert into Units at the Closing as described above.
In accordance with the Purchase Agreement, the Company intends to appoint two new Class I directors designated by Ospraie to the Company’s board of directors, effective upon the Closing. In addition, the Company has agreed to take all necessary actions to procure the election of two additional directors designated by Ospraie to the Company’s board of directors as Class II directors at the Company’s 2018 Annual Meeting of Stockholders.
The Company expects to receive approximately $27.7 million of cash net proceeds from the proposed transactions, which it intends to use for working capital and general corporate purpose. National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (NASDAQ:NHLD), acted as exclusive placement agent and financial adviser to the Company.
Upon closing of the proposed transactions, the Company expects to have an aggregate of approximately 101.9 million shares of Common Stock outstanding, as well as outstanding warrants to purchase an aggregate of approximately 52.7 million shares of Common Stock for a weighted average exercise price of $1.10 per share, in each case assuming no issuances between the date of this press release and the Closing other than those contemplated by the proposed transactions.
Furthermore, the Company’s outstanding indebtedness is expected to be reduced from an aggregate principal amount of $62.5 million to $17.5 million. With respect to the $5,000,000 and $2,450,000 aggregate principal amounts that will remain outstanding under the Waddell Notes and the Snyder Loan Agreement, respectively, the final maturity dates have been extended to December 31, 2022 and the associated interest payments have been deferred until such date. In addition, the interest rate under the Snyder Loan Agreement has also been reduced from 14% to 8%, matching the interest rate presently outstanding under the Waddell Notes.
Subject to satisfaction of conditions to the Closing, the transactions announced today are expected to provide financial support for the Company’s continued operations and future development goals for the foreseeable future, and will result in significant improvements to the Company’s balance sheet, reductions to the Company’s anticipated interest expense going forward and significant improvements to the Company’s future cash flows.
“We believe these transactions represent a significant milestone in our corporate history, putting us in a strong position to execute and focus on our core business — which continues to drive ahead,” said Pamela G. Marrone, Ph.D., CEO of MBI.
Source: Marrone Bio Innovations
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