Quotient Limited Announces Proposed Amendments to Senior Secured Notes

Rhea-AI Summary

Quotient Limited (Nasdaq: QTNT) has announced improved debt terms that will reduce principal amortization payments by $93 million over the next 36 months. The company has amended its 12% Senior Secured Notes to alter the amortization schedule, shifting to quarterly payments of $2.5 million starting July 2024. The amendments are contingent upon raising at least $15 million in a public offering by July 15, 2022. In exchange for the debt restructuring, SSN holders will be granted warrants for 5% of the company's outstanding shares.

Positive

• Reduction of $93 million in principal amortization payments over 36 months.
• Amendment of payment schedule to improve cash flow.
• Warrants issued to SSN holders could increase investor interest.

Negative

• Public offering contingent on raising at least $15 million, creating uncertainty.
• SSN holders gain board observer rights, potentially influencing company decisions.

Improved debt terms reduces $93 million principal amortization payments over next 36 months

JERSEY, Channel Islands, June 23, 2022 (GLOBE NEWSWIRE) -- Quotient Limited (Nasdaq: QTNT) (the Company), a commercial-stage diagnostics company, today announced that in connection with the public offering announced today, the Company has agreed with the beneficial owners of all $132.9 aggregate principal amount of its 12% Senior Secured Notes due 2025 (the SSNs) to amend the indenture governing the SSNs to:

• Reduce expected amortization payments by $93 million over the next 36 months, by replacing the current amortization schedule (requiring semi-annual amortization payments beginning April 2023 ranging from $12.1 million to $24.2 million) with a schedule requiring quarterly payments of $2.5 million beginning in July 2024 and ending in July 2025, with the remaining principal balance due in October 2025; and
• Make various other changes, including the addition of a provision requiring that 40% of the net cash proceed from any sale of the Company's Alba business will be applied to repay SSNs and specifying that the Company can use the balance of the proceeds to fund operating expenses, capital expenditures and other investments permitted by the indenture.

The Company has agreed that the holders of the SSNs will be entitled to appoint an observer to the Company's board of directors. In consideration of the SSN holders' consent to the amendments referred to above, the Company has agreed to issue to those holders warrants exercisable for 5% of the aggregate amount of the Company's ordinary shares that are issued and outstanding immediately after completion of the public offering. The exercise price for the warrants will be the greater of (i) $0.75 per share or (ii) 150% of the price at which ordinary shares are offered to the public in the offering.

The effectiveness of the amendments of the Senior Secured Notes described above is conditioned on the Company's raising gross cash proceeds of not less than $15 million in the public offering and any other offering of ordinary shares completed on or prior to July 15, 2022.

About Quotient Limited

Building on over 30 years of experience in transfusion diagnostics, Quotient is a commercial-stage diagnostics company committed to delivering solutions that it believes reshape the way diagnostics are practiced. The MosaiQ solution, Quotient’s proprietary multiplex microarray technology, offers the world’s first fully automated, consolidated testing platform, allowing for multiple tests across different modalities. The MosaiQ solution is designed to be a game-changing solution, which Quotient believes will increase efficiencies, improve clinical practice, deliver significant workflow improvements, and create operational cost savings to laboratories around the world. Quotient's operations are based in Switzerland, Scotland, US and the UAE.

The Quotient logo, Quotient MosaiQ and MosaiQ are registered trademarks or trademarks of Quotient Limited and its subsidiaries in various jurisdictions.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements regarding the proposed underwritten public offering, including the anticipated offering size. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including: market conditions; Quotient's ability to satisfy closing conditions related to the proposed offering; and other risks set forth in Quotient's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as well as other documents that Quotient files with the Securities and Exchange Commission, including the Registration Statement on Form S-3 (File No. 333-248235), as amended by Amendment No. 1, for the offering. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Quotient disclaims any obligation to update these forward-looking statements because of new information, future events or circumstances or other factors. The Quotient logo, Quotient MosaiQ and MosaiQ are trademarks or registered trademarks of Quotient Limited or its subsidiaries in various jurisdictions.

CONTACT: Investor Relations, ir@quotientbd.com; +41 22 545 52 26

FAQ

What financial changes did Quotient Limited announce on June 23, 2022?

Quotient Limited announced a reduction of $93 million in principal amortization payments over the next 36 months by amending its Senior Secured Notes.

How will Quotient Limited's debt restructuring impact its cash flow?

The debt restructuring will lower expected amortization payments, providing better cash flow management.

What condition must Quotient Limited meet for the debt amendments to take effect?

Quotient Limited must raise gross cash proceeds of at least $15 million in a public offering by July 15, 2022.

What warrants were issued to the holders of Quotient Limited's Senior Secured Notes?

SSN holders will receive warrants exercisable for 5% of the company's ordinary shares post-public offering.

What is the significance of the observer rights given to SSN holders?

The observer rights allow SSN holders to influence company decisions, which may impact shareholder interests.