Business
Rockwell Medical Amends Loan and Security Agreement with Innovatus Life Sciences Lending Fund
Defers principal payments of $8.0 million up to three years, reduces Rockwell's need for additional operating capital, and enhances the Company's cash
About this update from Rockwell Medical, Inc.
[{"type":"text","content":"\nDefers principal payments of $8.0 million up to three years, reduces Rockwell's need for additional operating capital, and enhances the Company's cash balance\n\n\nRockwell Medical provides preliminary projected fourth quarter and full-year 2023 financial results\n\n\n WIXOM, Mich.--(BUSINESS WIRE)--\nRockwell Medical, Inc. (the \"Company\") (Nasdaq: RMTI), a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products to dialysis providers worldwide, today announced that the Company amended its loan and security agreement with Innovatus Life Sciences Lending Fund I, LP (\"Innovatus\").\n\n\nRockwell Medical and its wholly owned subsidiary, Rockwell Transportation, Inc., initially entered into a loan and security agreement with Innovatus on March 16, 2020 under which Innovatus agreed to make certain term loans to the Company, of which the Company drew down approximately $21.0 million. At December 31, 2023, the Company's outstanding balance under those term loans was $8.0 million (the \"Term Loans\").\n\n\nUnder the terms of the third amended and restated loan and security agreement (the \"Amendment\"), Rockwell Medical reduced the interest rate on, and extended the loan maturity date for, the Term Loans from March 2025 to January 2029. The Company will make interest-only payments for thirty months, or up to thirty-six months if certain conditions are met. In connection with the execution of the Amendment, the Company issued to Innovatus a warrant to purchase 191,096 shares of the Company's common stock with an exercise price of $1.83 per share. The warrant is immediately exercisable through January 2, 2029.\n\n\n\"Over the past 18 months, we significantly reduced the leverage on our business,\" said Mark Strobeck, Ph.D., President and CEO of Rockwell Medical. \"As we work towards sustained profitability and positive cash flow, we continue to seek ways to enhance our financial stability and our cash balance. Based on the amortization schedule under the loan and security agreement prior to the Amendment, we would have been required to pay off $6.0 million of the outstanding debt in 2024 and $2.0 million in 2025, which would have significantly reduced our cash balance during this period. While the Amendment extends the maturity date of the Term Loans out to January 2029, it ...