Medexus Announces US$58.5 million in New Credit Facilities

Rhea-AI Summary

Medexus Pharmaceuticals (OTCQX: MEDXF) announced a new senior secured credit agreement with BMO, comprising a US$35 million term loan and a US$3.5 million revolving loan for working capital. The agreement, maturing in March 2026, includes a US$20 million uncommitted accordion feature. CFO Marcel Konrad highlighted the non-dilutive nature of the financing and the company's recent revenue growth and improving profitability. The proceeds will repay existing facilities due in July 2023, with new borrowings set at an initial interest rate of 8.58%, lower than the previous rates of 11.33% and 8.78%.

Positive

• Secured US$35 million term loan and US$3.5 million revolving loan for working capital.
• Non-dilutive financing, preserving shareholder value.
• Lower initial interest rate of 8.58% compared to previous loans.

Negative

• None.

TORONTO and CHICAGO, March 08, 2023 (GLOBE NEWSWIRE) -- Medexus Pharmaceuticals (TSX: MDP; TSX: MDP.DB; OTCQX: MEDXF) today entered into a new senior secured credit agreement agented by BMO. The credit agreement provides for a US$35 million term loan facility and a US$3.5 million revolving loan facility for working capital. The term loan facility benefits from an additional US$20 million uncommitted accordion feature, which Medexus is confident will be available. The new BMO facilities will mature in March 2026, being three years from the date of the credit agreement.

“As we look ahead to fiscal year 2024, we are pleased to announce this non-dilutive debt financing, which demonstrates our access to capital on competitive terms,” commented Marcel Konrad, Chief Financial Officer of Medexus. “Medexus has delivered sequential revenue growth and improving profitability over the past five fiscal quarters, and we are pleased that our new partners at BMO have recognized the strength and stability of our business.”

Medexus used the net proceeds of the new term loan facility to satisfy all obligations under Medexus’s existing senior secured credit facilities, which otherwise would have matured in July 2023. Borrowings under the new term loan facility bear interest at a rate of adjusted term SOFR plus a margin determined quarterly based on Medexus’s consolidated leverage ratio. The interest rate will initially be 8.58%. This rate compares favorably to Medexus’s now-repaid term loan and asset-based revolving loan facilities, which had interest rates of 11.33% and 8.78% as of the repayment date.

About Medexus

Medexus is a leading specialty pharmaceutical company with a strong North American commercial platform and a growing portfolio of innovative and rare disease treatment solutions. Medexus’s current focus is on the therapeutic areas of hematology, oncology, auto-immune diseases, and allergy. For more information about Medexus and its product portfolio, please see the company’s corporate website at www.medexus.com and its filings on SEDAR at www.sedar.com.

Contacts

Ken d’Entremont | CEO, Medexus Pharmaceuticals
Tel: 905-676-0003 | Email: ken.dentremont@medexus.com

Marcel Konrad | CFO, Medexus Pharmaceuticals
Tel: 312-548-3139 | Email: marcel.konrad@medexus.com

Victoria Rutherford | Adelaide Capital
Tel: 480-625-5772 | Email: victoria@adcap.ca

Forward-looking statements

Certain statements made in this news release contain forward-looking information within the meaning of applicable securities laws (forward-looking statements). The words “anticipates”, “believes”, “expects”, “will”, “plans”, “potential”, and similar words, phrases, or expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words, phrases, or expressions. Specific forward-looking statements in this news release include, but are not limited to, statements regarding expectations with respect to availability of funds from financing activities, funds from operations, and cash flow generation (including anticipated cash needs, capital requirements, and needs for and ability to secure additional financing) and the availability of the uncommitted accordion facility (including the likelihood of those funds becoming available). These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions, and expected future developments. Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. Medexus cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. Material risk factors include, but are not limited to, those set out in Medexus’s materials filed with the Canadian securities regulatory authorities from time to time, including Medexus’s most recent annual information form and management’s discussion and analysis. Given these risks, undue reliance should not be placed on these forward-looking statements, which are made only as of the date of this news release. Other than as specifically required by law, Medexus undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.

FAQ

What is the significance of Medexus's new credit agreement dated March 8, 2023?

The new credit agreement allows Medexus to access US$35 million for a term loan and US$3.5 million revolving loan, vital for working capital and replacing maturing obligations.

How does the interest rate on Medexus's new loan compare to previous loans?

The initial interest rate on the new loan is 8.58%, which is lower than the prior rates of 11.33% and 8.78%.

When does the new credit agreement for Medexus mature?

The new credit agreement matures in March 2026.

What does the non-dilutive funding mean for Medexus shareholders?

Non-dilutive funding means that Medexus can secure financing without issuing additional shares, thus preserving existing shareholders' equity.