Exhibit
10.1
FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS
FIRST AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into as of August 9, 2022, by and among
INNOVATUS LIFE SCIENCES LENDING FUND I, LP, a Delaware limited partnership, as collateral agent (in such capacity, together with its
successors and assigns in such capacity, “Collateral Agent”), and the Lenders listed on Schedule 1.1 of the Loan Agreement
(as defined herein) or otherwise a party to the Loan Agreement from time to time including INNOVATUS LIFE SCIENCES LENDING FUND I, LP
in its capacity as a Lender, and CELCUITY, INC., a Delaware corporation (“Borrower”).
WHEREAS,
Collateral Agent, Borrower and Lenders have entered into that certain Loan and Security Agreement, dated as of April 8, 2021 (as amended,
supplemented or otherwise modified from time to time, the “Loan Agreement”) pursuant to which Lenders have provided
to Borrower certain loans in accordance with the terms and conditions thereof; and
WHEREAS,
Borrower, Lenders and Collateral Agent desire to amend certain provisions of the Loan Agreement.
NOW,
THEREFORE, in consideration of the promises, covenants and agreements contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Borrower, Lenders and Collateral Agent hereby agree as follows:
| 1. | Capitalized
terms used herein but not otherwise defined shall have the respective meanings given to them
in the Loan Agreement. |
| 2. | Section
2.2(a) of the Loan Agreement is hereby amended and restated as follows: |
(a)
Availability.
(i)
Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make a term loan to Borrower
on the effective date in an aggregate principal amount of up to Fifteen Million Dollars ($15,000,000.00) according to each Lender’s
Term Loan Commitment as set forth in Schedule 1.1 hereto (the “Term A Loan”). After repayment, the Term A Loan may
not be re-borrowed. The parties hereby acknowledge that the Term A Loan was funded in its entirety on the Effective Date.
(ii)
Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make a term loan to Borrower
during the Term B Draw Period in an aggregate principal amount of up to Twenty Million ($20,000,000.00) according to each Lender’s
Term B Loan Commitment as set forth in Schedule 1.1 hereto (the “Term B Loan”). After repayment, the Term B Loan may
not be re-borrowed.
(iii)
Subject to the Borrower having first achieved the Term B Milestone by the expiration of the Term B Draw Period and the other terms and
conditions of this Agreement, the Lenders agree, severally and not jointly, to make a term loan to Borrower during the Term C Draw Period
in an aggregate principal amount of up to Ten Million ($10,000,000.00) according to each Lender’s Term Loan Commitment as set forth
in Schedule 1.1 hereto (the “Term C Loan”). After repayment, the Term C Loan may not be re-borrowed.
(iv)
Subject to the Borrower having first achieved the Term B Milestone by the expiration of the Term B Draw Period and the other terms and
conditions of this Agreement, the Lenders agree, severally and not jointly, to make a term loan to Borrower during the Term D Draw Period
in an aggregate principal amount of up to Twenty Million ($20,000,000.00) according to each Lender’s Term Loan Commitment as set
forth in Schedule 1.1 hereto (the “Term D Loan”). After repayment, the Term D Loan may not be re-borrowed.
(v)
Subject to the Borrower having first achieved the Term B Milestone by the expiration of the Term B Draw Period and the other terms and
conditions of this Agreement, the Lenders agree, severally and not jointly, to make a term loan to Borrower during the Term E Draw Period
in an aggregate principal amount of up to Ten Million ($10,000,000.00) according to each Lender’s Term Loan Commitment as set forth
in Schedule 1.1 hereto (the “Term E Loan;” each Term A Loan, Term B Loan, Term C Loan, Term D Loan and Term E Loan
is referred to singly as a “Term Loan” and the Term A Loan, Term B Loan, Term C Loan, Term D Loan and Term E Loan
are referred to collectively as the “Term Loans”). After repayment, the Term E Loan may not be re-borrowed.
| 3. | Section
2.2(d) of the Loan Agreement is hereby amended and restated as follows: |
(d)
Permitted Prepayment of Term Loan. After the date that is the first anniversary of the First Amendment Effective Date, the Borrower
shall have the option to prepay all, but not less than all, of the Term Loan advanced by the Lenders under this Agreement, provided Borrower
(i) provides written notice to Collateral Agent of its election to prepay the Term Loan at least seven (7) Business Days prior to such
prepayment, and (ii) pays to Collateral Agent for the benefit of each Lenders on the date of such prepayment, payable to each Lender
in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding principal of the Term Loan plus accrued
and unpaid interest thereon through the prepayment date, (B) the Final Fee, (C) the Prepayment Fee, plus (D) all other outstanding Obligations
that are due and payable, including, without limitation, Lenders’ Expenses and interest at the Default Rate with respect to any
past due amounts.
Notwithstanding
anything herein to the contrary, after the first anniversary of the First Amendment Effective Date, Borrower shall also have the option
to prepay part of Term Loans advanced by the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral
Agent of its election to prepay the Term Loans at least seven (7) Business Days prior to such prepayment, (ii) prepays such part of the
Term Loans in a principal amount of Five Million Dollars ($5,000,000.00) or a whole multiple of One Million Dollars ($1,000,000.00) in
excess thereof, and (iii) pays to the Lenders on the date of such prepayment, payable to each Lender in accordance with its respective
Pro Rata Share, an amount equal to the sum of (A) the portion of outstanding principal of such Term Loans plus all accrued and unpaid
interest thereon through the prepayment date, (B) the applicable Final Fee, and (C) all other Obligations that are then due and payable,
including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts, and (D) the applicable Prepayment
Fee with respect to the portion of such Term Loans being prepaid. For the purposes of clarity, any partial prepayment shall be applied
pro-rata to all outstanding amounts under each Term Loan, and shall be applied pro-rata within each Term Loan tranche to reduce amortization
payments under Section 2.2(b) on a pro-rata basis.
| 4. | Section
2.3(a) of the Loan Agreement is hereby amended and restated as follows: |
(a)
Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Term Loan shall accrue interest at a floating
per annum rate equal to the Basic Rate, determined by Collateral Agent on the Funding Date of the Term Loan and monthly thereafter, which
interest shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e); provided that at the election of Borrower
(which shall be considered elected on the Funding Date of the applicable Term Loan) with no less than five (5) Business Days’ written
notice to Collateral Agent prior to the Funding Date, 4.95% of the Basic Rate may be payable in-kind by adding an amount equal to such
4.95% of the outstanding principal amount to the then outstanding principal balance on a monthly basis until the Amortization Date so
as to increase the outstanding principal balance of the Term Loan on each Payment Date and which amount shall be payable when the principal
amount of the applicable Term Loan is payable in accordance with Sections 2.2(b) and 2.3(e) and on which principal amount interest shall
be owed pursuant to Section 2.3(a).
Interest
shall accrue on each Term Loan commencing on, and including, the Funding Date of such Term Loan, and shall accrue on the principal amount
outstanding under such Term Loan through and including the day on which such Term Loan is paid in full.
| 5. | Section
2.4(a) of the Loan Agreement is hereby amended and restated as follows: |
(a)
Facility Fee. The Facility Fee, which shall be due on the Funding Date of the Term A Loan, to be shared among the Lenders in accordance
with their respective Pro Rate Shares;
| 6. | Section
2.4 of the Loan Agreement is hereby amended by adding the following subsections thereto: |
(e)
Term C Loan Non-Utilization Fee. If the Term C Draw Period commences and Borrower (i) fails to draw the full amount of the Term
C Loan during the Term C Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is two (2) weeks after
the commencement of the Term C Draw Period, of Borrower’s intent not to draw the full amount of the Term C Loan, a non-utilization
fee of Three Hundred Thousand Dollars ($300,000.00), with respect to the Term C Loan shall become due and payable on the earliest of
(i) the termination of the Term C Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, or (iv) the prepayment
in whole of the Term Loan pursuant to Section 2.2(c) or (d);
(f)
Term D Loan Non-Utilization Fee. If the Term D Draw Period commences and Borrower (i) fails to draw the full amount of the Term
D Loan during the Term D Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is two (2) weeks after
the commencement of the Term D Draw Period, of Borrower’s intent not to draw the full amount of the Term D Loan, a non-utilization
fee of Six Hundred Thousand Dollars ($600,000.00), with respect to the Term D Loan shall become due and payable on the earliest of (i)
the termination of the Term D Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, or (iv) the prepayment in
whole of the Term Loan pursuant to Section 2.2(c) or (d); and
(g)
Term E Loan Non-Utilization Fee. If the Term E Draw Period commences and Borrower (i) fails to draw the full amount of the Term
E Loan during the Term E Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is two (2) weeks after
the commencement of the Term E Draw Period, of Borrower’s intent not to draw the full amount of the Term E Loan, a non-utilization
fee of Three Hundred Thousand Dollars ($300,000.00), with respect to the Term E Loan shall become due and payable on the earliest of
(i) the termination of the Term E Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, or (iv) the prepayment
in whole of the Term Loan pursuant to Section 2.2(c) or (d).
| 7. | Section
2.7 of the Loan Agreement is hereby amended and restated as follows: |
2.7
Conversions to Equity. Lenders shall have the right at their election, but not the obligation, until the third anniversary of the
First Amendment Effective Date, to convert (i) up to twenty percent (20.00%) of the outstanding principal amount of the Term A Loan and
(ii) an additional seven percent (7.00%) of the amount by which the aggregate principal amount of any additional Term Loans (or portion
thereof) made hereunder if the outstanding principal amount of all the Term Loans made hereunder (inclusive of such additional Term Loans
(or portion thereof)) exceeds Thirty Five Million Dollars ($35,000,000.00) into shares of Common Stock of Borrower at a price per share
of Ten Dollars ($10.00), which price shall be subject to appropriate adjustment for any stock split, stock dividend, combination, or
other recapitalization or reclassification effected after the First Amendment Effective Date). Such shares shall be referred to herein
as “Borrower Equity.”
To
exercise their rights under this Section 2.7, the applicable Lender(s) shall notify Borrower in writing of the then outstanding principal
amount of the Term Loans that is to be converted into Borrower Equity. Borrower shall no later than seven (7) days after the receipt
of such notice issue the applicable number of shares of its Common Stock to the applicable Lender(s). Upon issuance of Borrower Equity
in accordance with the provisions of this Section 2.7, the principal amount of Term Loans so converted shall be deemed to have been prepaid
for the purposes of this Agreement, provided, however, no Prepayment Fee or Final Fee shall be due with respect to such deemed prepayment.
The applicable Lenders shall also in connection with the issuance of Borrower’s Equity securities pursuant to this Section 2.7,
enter into such agreements as reasonably requested by Borrower with customary terms and provisions for such transactions.
| 8. | Section
3.2 of the Loan Agreement is hereby amended by deleting “and” at the end of subsection
(g) thereof, replacing “.” at the end of subsection (h) thereof with “;”
and adding the following subsections thereto: |
(i)
if such Term Loan is the Term D Loan, the Term D Milestone must have been met and the pro forma aggregate funded principal amount of
the Term Loans (i.e., after giving effect to the funding of the Term D Loan) as a percentage of the volume weighted average market capitalization
of Borrower for the 10 trading days immediately preceding the Funding Date of Term D Loan is 35% or less; and
(j)
if such Term Loan is the Term E Loan, the Term E Milestone must have been met and the pro forma aggregate funded principal amount of
the Term Loans (i.e., after giving effect to the funding of the Term E Loan) as a percentage of the volume weighted average market capitalization
of Borrower for the 10 trading days immediately preceding the Funding Date of Term E Loan is 35% or less.
| 9. | Section
6.12 of the Loan Agreement is hereby amended and restated as follows: |
6.12
Financial Covenant. Prior to the occurrence of the FDA Approval Event, during each fiscal quarter (or if applicable, part thereof)
Borrower shall maintain in Collateral Accounts subject to Control Agreements in favor of Collateral Agent aggregate unrestricted cash
balance of not less than the following aggregate amounts:
| |
Volume
weighted average market capitalization of Borrower during the immediate preceding quarter ($ million) |
|
Minimum
aggregate unrestricted cash balance in Collateral Accounts
(subject
to Control Agreements in favor of Collateral Agent) during the quarter:
|
| |
>$200 |
|
10%
of the aggregate funded amount of Term Loans
|
| |
$150-$200 |
|
The
greater of (i) $3.5 million or (ii) 10% of the aggregate funded amount of Term Loans
|
| |
$100-$150 |
|
The
greater of (i) $5.0 million or (ii) 15% of the aggregate funded amount of Term Loans
|
| |
<$100 |
|
The
greater of $7.5 million or (ii) 20% of the aggregate funded amount of Term Loans |
Commencing
with the occurrence of the FDA Approval Event, as tested on the last day of each quarter, actual TTM Revenue for the 12-month period
then ended in an amount not less than fifty percent (50.00%) of the projections for the same 12-month period as then ended as set forth
in the Borrower’s financial projections for such period, which financial projections have been approved by Borrower’s Board
of Directors and are reasonably acceptable to Collateral Agent.
Notwithstanding
anything herein to the contrary, Borrower shall not be obligated to comply with the provisions of this Section 6.12 during any fiscal
quarter of Borrower if either (i) Borrower’s actual TTM Revenue for the 12-month period ended on the last day of the immediately
preceding quarter was at least Seventy Five Million Dollars ($75,000,000.00) or (ii) the Borrower has been cash flow positive for its
two most recently completed fiscal quarters.
| 10. | Section
8.2(a) of the Loan Agreement is hereby amended and restated as follows: |
(a)
Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Section 2.7, Sections 6.2 (Financial Statements, Reports,
Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Landlord
Waivers; Bailee Waivers), 6.10 (Creation/Acquisition of Subsidiaries), 6.12 (Financial Covenant) or 6.13 (Liquidity Covenant) or Borrower
violates any provision in Section 7; provided, however, in the event that the Borrower fails to comply with the requirements of the financial
covenant set forth in Section 6.12, Borrower may cure such breach by means of submitting a new financial plan to Collateral Agent under
which Borrower will break even on a cashflow basis prior to Maturity Date (which financial plan must include provisions for how Borrower
will secure funding to support such financial plan and which must be acceptable to Collateral Agent and approved by Borrower’s
Board of Directors) no later than thirty (30) days after the occurrence of the breach of the financial covenant and raising, no later
than thirty (30) days after the submission of such financial plan to Collateral Agent, such amount of capital from the sale and issuance
of its equity securities as required per the new financial plan; provided, that upon such cure the parties shall amend the covenant in
Section 6.12 in accordance with the new financial plan which amendment must be acceptable to Collateral Agent and shall, among other
things, require Borrower to achieve the revenue projections set forth in the new financial plan; or
| 11. | Section
13 of the Loan Agreement is hereby amended by adding the following definition thereto in
alphabetical order: |
“First
Amendment Effective Date” is August 9, 2022.
“PIPE
Financing” is the sale and issuance of its equity securities in a private placement transaction on or after May 1, 2022, which
sale was announced by Borrower on May 16, 2022, of at least One Hundred Million Dollar ($100,000,000.00) and the receipt by Borrower
of the net proceeds thereof.
“Term
D Draw Period” is the period commencing on August 1, 2024 and ending on the earlier of (i) November 1, 2024 and (ii) the occurrence
of an Event of Default (unless such Event of Default is waived by Collateral Agent and Lenders for the purposes of the continuation of
the Term D Draw Period).
“Term
D Milestone” is the achievement by Borrower of (i) either (a) Study 1 Arm A (for Borrower’s product candidate Gedatolisib
in combination with Palbociclib and Fulvestrant) reports a statistically significant improvement in progression-free survival relative
to Study 1 Arm C (for Fulvestrant) or (b) Study 1 Arm B (for Borrower’s product candidate Gedatolisib in combination Fulvestrant)
reports a statistically significant improvement in progression-free survival relative to Study 1 Arm C (for Fulvestrant); (ii) Borrower’s
compliance with its obligations under Section 6.12 (without taking into account any cure or remedy for a breach of such obligations)
at all times through quarter ending immediately prior to the Funding Date of the Term D Loan.
“Term
E Draw Period” is the period commencing on November 1, 2024 and ending on the earlier of (i) February 28, 2025 and (ii) the
occurrence of an Event of Default (unless such Event of Default is waived by Collateral Agent and Lenders for the purposes of the continuation
of the Term E Draw Period).
“Term
E Milestone” is the achievement by Borrower of (i) having submitted an NDA application to the FDA for Borrower’s product
candidate Gedatolisib and (ii) Borrower’s compliance with its obligations under Section 6.12 (without taking into account any cure
or remedy for a breach of such obligations) at all times through quarter ending immediately prior to the Funding Date of the Term E Loan.
| 12. | Section
13 of the Loan Agreement is hereby further amended by amending and restating the following
definition therein as follows: |
“Amortization
Date” is (i) May 1, 2025, if the I/O Extension Event does not occur and (ii) May 1, 2026, if the I/O Extension Event occurs.
“Basic
Rate” is with respect to each Term Loan, the floating per annum rate of interest (based on a year of three hundred sixty five
(365) days) equal to the sum of (a) greater of (i) Prime Rate, subject to Section 2.3(f), or (ii) Three and Twenty-Five Hundredths percent
(3.25%) plus (b) Five and Seven Tenths percent (5.70%).
“Facility
Fee” is a fee due on the Funding Date of the Term A Loan, equal to 1.00% of the amount of the Term A Loan, payable to the Lenders
in accordance with their Pro Rate Shares of the Term A Loan.
“Final
Fee” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest
or any other fee payable hereunder) due on the earliest to occur of (a) the Maturity Date, (b) the acceleration of any Term Loan, or
(c) the prepayment of the Term Loan pursuant to Section 2.2(c) or (d), in each case equal to Four and one-half percent (4.50%) (if such
payment becomes due prior to the third anniversary of the First Amendment Effective Date )multiplied by the aggregate amount of the Term
Loans funded and not converted to Borrower Equity pursuant to Section 2.7, payable to Lenders in accordance with their respective Pro
Rata Shares. For the avoidance of doubt, the calculation of any Final Fee payment shall not include the principal amount prepaid in accordance
with the second paragraph of Section 2.2(d) if a Final Fee payment based on such principal amount was made at the time of such prepayment.
Notwithstanding anything herein to the contrary, if none of the following occur by the date that is the third anniversary of the First
Amendment Effective Date, no Final Fee shall be due and payable: (a) the Maturity Date, (b) the acceleration of any Term Loan, or (c)
the prepayment of the Term Loan pursuant to Section 2.2(c).
“I/O
Extension Event” is the achievement by Borrower of the Term D Milestone.
“Maturity
Date” is April 8, 2027.
“Prepayment
Fee” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary
prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:
(i)
for a prepayment made after the date which is the first anniversary of the First Amendment Effective Date through and including the date
which is the third anniversary of the First Amendment Effective Date, one percent (1.00%) of the principal amount (including any applicable
payable in-kind amount) of the Term Loan prepaid;
(ii)
for a prepayment made after the date which is the third anniversary of the First Amendment Effective Date and prior to the Maturity Date,
zero percent (0.00%) of the principal amount (including any applicable payable in-kind amount) of the Term Loan prepaid; and
(iii)
for a mandatory prepayment made on or after the First Amendment Effective Date and through and included the date that is the first anniversary
of the First Amendment Effective Date, three percent (3.00%) of the principal amount (including any applicable payable in-kind amount)
of the Term Loan prepaid.
“Term
B Draw Period” is the period commencing on the First Amendment Effective Date and ending on the earlier of (i) December 31,
2022 or (ii) the occurrence of an Event of Default (unless such Event of Default is waived by Collateral Agent and Lenders for the purposes
of the continuation of the Term B Draw Period).
“Term
B Milestone” is (i) the consummation of the PIPE Financing by Borrower and (ii) Borrower’s compliance with its obligations
under Section 6.12 (without taking into account any cure or remedy for a breach of such obligations) at all times through quarter ending
immediately prior to the Funding Date of the Term B Loan.
“Term
C Draw Period” is the period commencing on September 1, 2023 and ending on the earlier of (i) April 1, 2024 or (ii) the occurrence
of an Event of Default (unless such Event of Default is waived by Collateral Agent and Lender for the purposes of the Term C Draw Period).
“Term
C Milestone” is the achievement of Borrower of (i) at least fifty percent (50%) of the targeted enrollment for the wild-type
Study 1 Arm A and the Study 1 Arm C in the VIKTORIA-1 clinical trial for Borrower’s product candidate Gedatolisib, (ii) the pro
forma aggregate funded principal amount of the Term Loans (i.e., after giving effect to the funding of the Term C Loan) as a percentage
of the volume weighted average market capitalization of Borrower for the 10 trading days immediately preceding the Funding Date of the
Term C Loan is 25% or less and (iii) compliance with its obligations under Section 6.12 (without taking into account any cure or remedy
for a breach of such obligations) at all times through quarter ending immediately prior to the Funding Date of the Term C Loan.
| 13. | Schedule
1.1 of the Loan Agreement is hereby amended and restated as follows: |
SCHEDULE
1.1
Lenders and Commitments
| | |
Term
A Loan | | |
| |
| Lender | |
Term
Loan A Commitment | | |
Commitment
Percentage | |
| INNOVATUS
LIFE SCIENCES LENDING FUND I, LP | |
$ | 15,000,000 | | |
| 100.00 | % |
| TOTAL | |
$ | 15,000,000 | | |
| 100.00 | % |
| | |
Term
B Loan | | |
| |
| Lender | |
Term
Loan B Commitment | | |
Commitment
Percentage | |
| INNOVATUS
LIFE SCIENCES LENDING FUND I, LP | |
$ | 20,000,000 | | |
| 100.00 | % |
| TOTAL | |
$ | 20,000,000 | | |
| 100.00 | % |
| | |
Term
C Loan | | |
| |
| Lender | |
Term
Loan C Commitment | | |
Commitment
Percentage | |
| INNOVATUS
LIFE SCIENCES LENDING FUND I, LP | |
$ | 10,000,000 | | |
| 100.00 | % |
| TOTAL | |
$ | 10,000,000 | | |
| 100.00 | % |
| | |
| | | |
| | |
| | |
Term
D Loan | | |
| |
| Lender | |
Term
Loan D Commitment | | |
Commitment
Percentage | |
| INNOVATUS
LIFE SCIENCES LENDING FUND I, LP | |
$ | 20,000,000 | | |
| 100.00 | % |
| TOTAL | |
$ | 20,000,000 | | |
| 100.00 | % |
| | |
Term
E Loan | | |
| |
| Lender | |
Term
Loan E Commitment | | |
Commitment
Percentage | |
| INNOVATUS
LIFE SCIENCES LENDING FUND I, LP | |
$ | 10,000,000 | | |
| 100.00 | % |
| TOTAL | |
$ | 10,000,000 | | |
| 100.00 | % |
| 14. | Limitation
of Amendment. |
| a. | The
amendments, consents and waiver set forth above are effective for the purposes set forth
herein and shall be limited precisely as written and shall not be deemed to (a) be a consent
to any amendment, waiver or modification of any other term or condition of any Loan Document,
or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may
now have or may have in the future under or in connection with any Loan Document, as amended
hereby. |
| b. | This
Amendment shall be construed in connection with and as part of the Loan Documents and all
terms, conditions, representations, warranties, covenants and agreements set forth in the
Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect. |
| 15. | To
induce Collateral Agent and Lenders to enter into this Amendment, Borrower hereby represents
and warrants to Collateral Agent and Lenders as follows: |
| a. | Immediately
after giving effect to this Amendment (a) the representations and warranties contained in
the Loan Documents are true, accurate and complete in all material respects as of the date
hereof (except to the extent such representations and warranties relate to an earlier date,
in which case they are true and correct as of such date), and (b) no Event of Default (other
than the Existing Defaults) has occurred and is continuing; |
| b. | Borrower
has the power and due authority to execute and deliver this Amendment and to perform its
obligations under the Loan Agreement, as amended by this Amendment; |
| c. | The
organizational documents of Borrower delivered to Collateral Agent on the Effective Date,
and updated pursuant to subsequent deliveries by or on behalf of the Borrower to the Collateral
Agent, remain true, accurate and complete and have not been amended, supplemented or restated
and are and continue to be in full force and effect; |
| d. | The
execution and delivery by Borrower of this Amendment and the performance by Borrower of its
obligations under the Loan Agreement, as amended by this Amendment, do not contravene (i)
any material law or regulation binding on or affecting Borrower, (ii) any material contractual
restriction with a Person binding on Borrower, (iii) any material order, judgment or decree
of any court or other governmental or public body or authority, or subdivision thereof, binding
on Borrower, or (iv) the organizational documents of Borrower; |
| e. | The
execution and delivery by Borrower of this Amendment and the performance by Borrower of its
obligations under the Loan Agreement, as amended by this Amendment, do not require any order,
consent, approval, license, authorization or validation of, or filing, recording or registration
with, or exemption by any governmental or public body or authority, or subdivision thereof,
binding on Borrower, except as already has been obtained or made; and |
| f. | This
Amendment has been duly executed and delivered by Borrower and is the binding obligation
of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other
similar laws of general application and equitable principles relating to or affecting creditors’
rights. |
| 16. | Except
as expressly set forth herein, the Loan Agreement shall continue in full force and effect
without alteration or amendment. This Amendment and the Loan Documents represent the entire
agreement about this subject matter and supersede prior negotiations or agreements. |
| 17. | The
Borrower hereby remises, releases, acquits, satisfies and forever discharges the Lenders
and Collateral Agent, their agents, employees, officers, directors, predecessors, attorneys
and all others acting or purporting to act on behalf of or at the direction of the Lenders
and Collateral Agent (“Releasees”), of and from any and all manner of
actions, causes of action, suit, debts, accounts, covenants, contracts, controversies, agreements,
variances, damages, judgments, claims and demands whatsoever, in law or in equity, which
any of such parties ever had, now has or, to the extent arising from or in connection with
any act, omission or state of facts taken or existing on or prior to the date hereof, may
have after the date hereof against the Releasees, for, upon or by reason of any matter, cause
or thing whatsoever relating to or arising out of the Loan Agreement or the other Loan Documents
on or prior to the date hereof through the date hereof. Without limiting the generality of
the foregoing, the Borrower waives and affirmatively agrees not to allege or otherwise pursue
any defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs or other
rights they do, shall or may have as of the date hereof, including the rights to contest:
(a) the right of Collateral Agent and each Lender to exercise its rights and remedies described
in the Loan Documents; (b) any provision of this Amendment or the Loan Documents; or (c)
any conduct of the Lenders or other Releasees relating to or arising out of the Loan Agreement
or the other Loan Documents on or prior to the date hereof. |
| 18. | This
Amendment shall be deemed effective as of the date first set forth above upon the due execution
and delivery to Collateral Agent of this Amendment by each party hereto. |
| 19. | This
Amendment may be executed in any number of counterparts, each of which shall be deemed an
original, and all of which, taken together, shall constitute one and the same instrument. |
| 20. | This
Amendment and the rights and obligations of the parties hereto shall be governed by and construed
in accordance with the laws of the State of New York. |
[Balance
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to Loan and Security Agreement to be executed as of the date
first set forth above.
| BORROWER: |
|
| |
|
| CELCUITY,
INC. |
|
| |
|
| By |
/s/
Brian F. Sullivan |
|
| Name: |
Brian
F. Sullivan |
|
| Title: |
Chief
Executive Officer |
|
COLLATERAL
AGENT AND LENDER:
INNOVATUS
LIFE SCIENCES LENDING FUND I, LP
By:
Innovatus Life Sciences GP, LP
Its:
General Partner
| By |
/s/
Andrew Dym |
|
| Name: |
Andrew
Dym |
|
| Title: |
Authorized
Signatory |
|
Exhibit
99.1
Celcuity
Inc. Reports Second Quarter 2022 Financial Results and Provides Corporate Update
| - | Granted
Breakthrough Therapy designation by the FDA for gedatolisib in HR+/HER2- advanced breast
cancer |
| | | |
| - | Entered
into agreements for the private placement sale of $100 million of equity and to increase
available debt facility from $25 million to $75 million |
| | | |
| - | The
Phase 3 VICTORIA-1 clinical trial remains on track to dose the first patient in the next
few months |
| | | |
| - | Management
to host webcast and conference call today, August 11, 2022, at 4:30 p.m. ET |
MINNEAPOLIS,
August 11, 2022 — Celcuity Inc. (Nasdaq: CELC), a clinical-stage biotechnology company focused on development of targeted therapies
for a number of different cancers, today announced financial results for the second quarter ended June 30, 2022 and other recent business
developments.
“We
made progress on a variety of fronts in the second quarter of 2022. The Breakthrough Therapy Designation recently granted to gedatolisib
by the FDA will facilitate close collaboration with the agency as we seek to advance this therapy to the clinic as quickly as possible.
Our early phase study evaluating gedatolisib in combination with palbociclib and fulvestrant in patients with advanced breast cancer
whose disease progressed on a CDK4/6 inhibitor, reported promising efficacy, with high response rates, and tolerability, with low discontinuation
rates due to adverse events. We are now excited to take the next step in the development of this potential first-in-class PI3K/mTOR inhibitor.
Our Phase 3 clinical trial, VIKTORIA-1, remains on track to dose the first patient in the next few months,” said Brian Sullivan,
CEO and Co-Founder of Celcuity.
“We
also made great progress strengthening our balance sheet over the past few months to support the clinical development of gedatolisib.
The $100 million private placement we signed in May and the amendment we signed just this week increasing our debt financing facility
to $75 million is expected to provide the capital we need to fund operations through 2025.”
Second
Quarter 2022 Business Highlights and Other Recent Developments
| ● | In
May, Celcuity entered into a definitive securities purchase agreement with certain institutional
and other accredited investors in a private placement for the purchase of common stock, preferred
stock that may be convertible into common stock and warrants initially exercisable for preferred
stock that is expected to result in aggregate proceeds to the Company of $100 million before
deducting placement agent fees and other offering expenses. Investors included Venrock Healthcare
Capital Partners, Commodore Capital, New Enterprise Associates (NEA), RA Capital Management,
Soleus Capital, and Brian Sullivan, the Company’s Chief Executive Officer. The closing
of the private placement is expected to occur shortly after the first patient in VIKTORIA-1
receives their first dose of treatment at a clinical site located in the United States, provided
that such date must occur on or before December 31, 2022. |
| ● | In
July, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation
to Celcuity’s lead drug product candidate gedatolisib, an investigational pan-PI3K/mTOR
inhibitor, for the treatment of HR+/HER2- locally advanced, inoperable or metastatic breast
cancer that has progressed after treatment with a CDK4/6 inhibitor in combination with a
nonsteroidal aromatase inhibitor. This designation allows for more intensive guidance from
the FDA and a potentially accelerated review time if relevant criteria are met. Gedatolisib
previously received Fast Track designation from the FDA in January 2022. |
| | |
| ● | This
week, Celcuity amended its existing debt financing agreement with an affiliate of Innovatus
Capital Partners, LLC (“Innovatus”) to provide Celcuity with up to $75 million
in term loans, a $50 million increase from the original debt financing agreement. Celcuity
received $15 million at the closing of the original agreement in April 2021. Celcuity will
be able to draw an additional $20 million tranche following the closing of the $100 million
private placement. Celcuity will be able to draw on two additional tranches of $10 million
each and one additional tranche of $20 million upon achievement of certain clinical trial
and financing milestones. Celcuity is entitled to make interest only payments for the 48-month
period from the original agreement date or for the 60-month period from the original agreement
date if certain conditions are met. The loans will mature on the sixth anniversary of the
initial funding date. Innovatus has the right to convert outstanding principal into shares
of Celcuity common stock until the third anniversary of the loan amendment date, with such
amount limited to an aggregate of up to $6.6 million assuming all tranches are funded. The
loan is secured by all of Celcuity’s assets. Armentum Partners LLC acted as sole advisor
to Celcuity for this transaction. |
| | |
| ● | The
VIKTORIA-1 Phase 3 clinical trial remains on track to dose the first patient in the next
few months. The operational activities required to initiate the clinical trial at a study
site are completed. The clinical trial protocol was updated to include an additional study
arm (Arm F) to evaluate gedatolisib plus fulvestrant in 50 patients who have PIK3CA mutations.
This update was made in response to a recommendation from the European Medicines Agency (EMA)
that the study arms for PIK3CA mutated patients mirror the same study arms for PIK3CA non-mutated
patients. No changes were made to the primary endpoints. VIKTORIA-1 will evaluate the safety
and efficacy of gedatolisib in combination with fulvestrant with or without palbociclib in
adults with HR+/HER2- advanced breast cancer whose disease progressed while receiving prior
CDK4/6 therapy. |
| | |
| ● | Enrollment
remains ongoing in the FACT-1 and FACT-2 trials for CELsignia selected patients who have
early-stage HR+/HER2- breast cancer with interim results expected in mid-2023. |
Second
Quarter 2022 Financial Results
Unless
otherwise stated, all comparisons are for the second quarter ended June 30, 2022, compared to the second quarter ended June 30, 2021.
The
following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes on
Form 10-Q for the second quarter ended June 30, 2022. Total operating expenses were $9.6 million for the second quarter of 2022, compared
to $13.6 million for the second quarter of 2021.
Research and development (R&D) expenses were $8.4 million for the second quarter
of 2022, compared to $13.1 million for the second quarter of 2021. The approximately $4.7 million decrease during the second quarter
of 2022, compared to the second quarter of 2021, reflected a $10 million reduction in gedatolisib licensing related expenses, partially
offset by increases of $5.3 million in other research and development expenses. Of the $5.3 million increase in research and development
expenses, $1.5 million was related to increased employee and consulting expenses, of which $0.5 million was in the form of non-cash stock-based
compensation. The remaining $3.8 million increase in research and development expenses is primarily related to costs for existing clinical
trials and for activities supporting the initiation of the VIKTORIA-1 pivotal trial.
General
and administrative (G&A) expenses were $1.2 million for the second quarter of 2022, compared to $0.6 million for the second quarter
of 2021. The approximately $0.6 million increase in G&A expenses during the second quarter of 2022, compared to the second quarter
of 2021, arose primarily from approximately $0.5 million in non-cash stock-based compensation.
Net
loss for the second quarter of 2022 was $10.0 million, or $0.67 loss per share, compared to a net loss of $14.0 million, or $1.11 loss
per share, for the second quarter of 2021. Non-GAAP adjusted net loss for the second quarter of 2022 was $8.3 million, or $0.55 loss
per share, compared to non-GAAP adjusted net loss of $8.3 million, or $0.66 loss per share, for the second quarter of 2021. Non-GAAP
adjusted net loss excludes stock-based compensation expense, issuance of common stock and non-cash interest. Because these items have
no impact on Celcuity’s cash position, management believes non-GAAP adjusted net loss better enables Celcuity to focus on cash
used in operations. For a reconciliation of financial measures calculated in accordance with generally accepted accounting principles
in the United States (GAAP) to non-GAAP financial measures, please see the financial tables at the end of this press release.
Net
cash used in operating activities for the second quarter of 2022 was $11.3 million, compared to $7.6 million for the second quarter of
2021. At June 30, 2022, Celcuity had cash and cash equivalents of $66.9 million, compared to cash and cash equivalents of $84.3 million
at December 31, 2021.
Webcast
and Conference Call Information
The
Celcuity management team will host a webcast/conference call at 4:30 p.m. ET today to discuss the second quarter 2022 financial results
and provide a corporate update. To participate in the teleconference, domestic callers should dial 1-877-407-0784 and international callers
should dial 1-201-689-8560 and reference conference ID: 13731012. A live webcast presentation can also be accessed using this weblink:
https://viavid.webcasts.com/starthere.jsp?ei=1557419&tp_key=2043138d9a. A replay of the webcast will be available on the Celcuity
website following the live event.
About
Celcuity
Celcuity
is a clinical-stage biotechnology company focused on development of targeted therapies for a number of different cancers. The company’s
lead therapeutic candidate is gedatolisib, a potent, reversible dual inhibitor that selectively targets all Class 1 PI3K isoforms and
mTOR. Its mechanism of action and pharmacokinetic properties are highly differentiated from other currently approved and investigational
therapies that target PI3K or mTOR alone or together. The company expects to initiate a Phase 3 study evaluating gedatolisib in patients
with HR+/HER2- advanced breast cancer and expects to dose the first patient in the next few months. Its CELsignia companion diagnostic
platform is uniquely able to analyze live patient tumor cells to identify new groups of cancer patients likely to benefit from already
approved targeted therapies. Celcuity is headquartered in Minneapolis. Further information about Celcuity can be found at www.celcuity.com.
About
Innovatus Capital Partners, LLC
Innovatus
Capital Partners, LLC, is an independent adviser and asset management firm with approximately $1.7B in assets under management. Innovatus
adheres to an investment strategy that identifies disruptive and growth opportunities across multiple asset categories with a unifying
theme of capital preservation, income generation, and upside optionality. The firm has a dedicated team of life sciences investment professionals
with deep experience in healthcare, including life sciences. Innovatus and its principals have significant experience providing debt
financing to medical device, diagnostics, and biotechnology companies that address unmet medical needs, improve patient outcomes, and
reduce overall healthcare expenditures. To date Innovatus Life Sciences Strategy has made over $1.2B in capital commitments for debt
and equity support. Further information can be found at www.innovatuscp.com.
Forward-Looking
Statements
This
press release contains statements that constitute “forward-looking statements” including, but not limited to, the timing
of initiating and enrolling patients in clinical trials and receiving results from such trials, including without limitation, Celcuity’s
planned Phase 3 clinical trial (VIKTORIA-1), the costs and expected results from any ongoing or planned clinical trials, expectations
with respect to planned clinical collaborations, the expected timing of funding for our private placement and additional tranches under
our debt financing agreement, and expectations with respect to available cash to fund operations. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential,” “intends” or “continue,”
and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or
other comparable terminology. Forward-looking statements are subject to numerous risks, uncertainties, and conditions, many of which
are beyond the control of Celcuity, which include, but are not limited to, the unknown impact of the COVID-19 pandemic on Celcuity’s
business and those other risks set forth in the Risk Factors section in Celcuity’s Quarterly Report for the period ended March
31, 2022 filed with the Securities and Exchange Commission on May 16, 2022. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Celcuity undertakes no obligation to update these statements for
revisions or changes after the date of this press release, except as required by law.
Contacts:
Celcuity
Inc.
Brian
Sullivan, bsullivan@celcuity.com
Vicky
Hahne, vhahne@celcuity.com
763-392-0123
ICR
Westwicke
Robert
Uhl, robert.uhl@westwicke.com
(619)
228-5886
Celcuity
Inc.
Condensed
Balance Sheets
| | |
June
30, 2022 | | |
December
31, 2021 | |
| | |
| (unaudited)
| | |
| | |
| Assets | |
| | | |
| | |
| Current
Assets: | |
| | | |
| | |
| Cash
and cash equivalents | |
$ | 66,910,824 | | |
$ | 84,286,381 | |
| Deposits | |
| 22,009 | | |
| 22,009 | |
| Deferred
transaction costs | |
| 332,824 | | |
| 22,144 | |
| Payroll
tax receivable | |
| 95,300 | | |
| 298,764 | |
| Prepaid
assets | |
| 4,601,874 | | |
| 722,677 | |
| Total
current assets | |
| 71,962,831 | | |
| 85,351,975 | |
| |
| | | |
| | |
| Property
and equipment, net | |
| 238,629 | | |
| 312,444 | |
| Operating
lease right-of-use assets | |
| 148,727 | | |
| 241,901 | |
| Total
Assets | |
$ | 72,350,187 | | |
$ | 85,906,320 | |
| |
| | | |
| | |
| Liabilities
and Stockholders’ Equity: | |
| | | |
| | |
| Current
Liabilities: | |
| | | |
| | |
| Accounts
payable | |
$ | 2,304,543 | | |
$ | 1,507,099 | |
| Finance
lease liabilities | |
| 5,379 | | |
| 5,850 | |
| Operating
lease liabilities | |
| 156,769 | | |
| 189,858 | |
| Accrued
expenses | |
| 1,683,305 | | |
| 802,893 | |
| Total
current liabilities | |
| 4,149,996 | | |
| 2,505,700 | |
| Finance
lease liabilities | |
| - | | |
| 2,449 | |
| Operating
lease liabilities | |
| - | | |
| 61,771 | |
| Note
payable, non-current | |
| 15,011,460 | | |
| 14,625,923 | |
| Total
Liabilities | |
| 19,161,456 | | |
| 17,195,843 | |
| Total
Stockholders’ Equity | |
| 53,188,731 | | |
| 68,710,477 | |
| Total
Liabilities and Stockholders’ Equity | |
$ | 72,350,187 | | |
$ | 85,906,320 | |
Celcuity Inc.
Condensed
Statements of Operations
(unaudited)
| | |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
| | |
| | |
| | |
| |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Research and development | |
$ | 8,367,687 | | |
$ | 13,070,108 | | |
$ | 15,064,000 | | |
$ | 15,306,451 | |
| General and administrative | |
| 1,233,040 | | |
| 573,360 | | |
| 2,044,332 | | |
| 1,128,787 | |
| Total operating expenses | |
| 9,600,727 | | |
| 13,643,468 | | |
| 17,108,332 | | |
| 16,435,238 | |
| Loss from operations | |
| (9,600,727 | ) | |
| (13,643,468 | ) | |
| (17,108,332 | ) | |
| (16,435,238 | ) |
| |
| | | |
| | | |
| | | |
| | |
| Other income (expense) | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| (455,445 | ) | |
| (391,187 | ) | |
| (890,446 | ) | |
| (391,210 | ) |
| Interest income | |
| 95,646 | | |
| 1,803 | | |
| 103,805 | | |
| 2,191 | |
| Loss on sale of fixed assets | |
| - | | |
| - | | |
| - | | |
| (263 | ) |
| Other income (expense), net | |
| (359,799 | ) | |
| (389,384 | ) | |
| (786,641 | ) | |
| (389,282 | ) |
| Net loss before income taxes | |
| (9,960,526 | ) | |
| (14,032,852 | ) | |
| (17,894,973 | ) | |
| (16,824,520 | ) |
| Income tax benefits | |
| - | | |
| - | | |
| - | | |
| - | |
| Net loss | |
$ | (9,960,526 | ) | |
$ | (14,032,852 | ) | |
$ | (17,894,973 | ) | |
$ | (16,824,520 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss per share, basic and diluted | |
$ | (0.67 | ) | |
$ | (1.11 | ) | |
$ | (1.20 | ) | |
$ | (1.42 | ) |
| |
| | | |
| | | |
| | | |
| | |
| Weighted average common shares outstanding, basic and diluted | |
| 14,930,538 | | |
| 12,610,917 | | |
| 14,923,900 | | |
| 11,845,758 | |
Cautionary
Statement Regarding Non-GAAP Financial Measures
This
press release contains references to non-GAAP adjusted net loss and non-GAAP adjusted net loss per share. Management believes these non-GAAP
financial measures are useful supplemental measures for planning, monitoring, and evaluating operational performance as they exclude
stock-based compensation expense, issuance of common stock and non-cash interest from net loss and net loss per share. Management excludes
these items because they do not impact Celcuity’s cash position, which management believes better enables Celcuity to focus on
cash used in operations. However, non-GAAP adjusted net loss and non-GAAP adjusted net loss per share are not recognized measures under
GAAP and do not have a standardized meaning prescribed by GAAP. As a result, management’s method of calculating non-GAAP adjusted
net loss and non-GAAP adjusted net loss per share may differ materially from the method used by other companies. Therefore, non-GAAP
adjusted net loss and non-GAAP adjusted net loss per share may not be comparable to similarly titled measures presented by other companies.
Investors are cautioned that non-GAAP adjusted net loss and non-GAAP adjusted net loss per share should not be construed as alternatives
to net loss, net loss per share or other statements of operations data (which are determined in accordance with GAAP) as an indicator
of Celcuity’s performance or as a measure of liquidity and cash flows.
Celcuity Inc.
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Loss and
GAAP Net Loss Per Share to Non-GAAP Adjusted Net Loss Per Share
(unaudited)
| | |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
| | |
| | |
| | |
| |
| GAAP net loss | |
$ | (9,960,526 | ) | |
$ | (14,032,852 | ) | |
$ | (17,894,973 | ) | |
$ | (16,824,520 | ) |
| Adjustments: | |
| | | |
| | | |
| | | |
| | |
| Stock-based compensation | |
| | | |
| | | |
| | | |
| | |
| Research and development (1) | |
| 810,664 | | |
| 328,077 | | |
| 1,261,183 | | |
| 583,258 | |
| General and administrative (2) | |
| 708,795 | | |
| 212,240 | | |
| 1,014,547 | | |
| 406,157 | |
| Issuance of common stock, licensing agreement (3) | |
| - | | |
| 5,000,000 | | |
| - | | |
| 5,000,000 | |
| Non-cash interest expense (4) | |
| 188,439 | | |
| 174,968 | | |
| 385,537 | | |
| 174,968 | |
| Non-GAAP adjusted net loss | |
$ | (8,252,627 | ) | |
$ | (8,317,566 | ) | |
$ | (15,233,706 | ) | |
$ | (10,660,137 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP net loss per share - basic and diluted | |
$ | (0.67 | ) | |
$ | (1.11 | ) | |
$ | (1.20 | ) | |
$ | (1.42 | ) |
| Adjustment to net loss (as detailed above) | |
| 0.12 | | |
| 0.45 | | |
| 0.18 | | |
| 0.52 | |
| Non-GAAP adjusted net loss per share | |
$ | (0.55 | ) | |
$ | (0.66 | ) | |
$ | (1.02 | ) | |
$ | (0.90 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average common shares outstanding, basic and diluted | |
| 14,930,538 | | |
| 12,610,917 | | |
| 14,923,900 | | |
| 11,845,758 | |
| |
(1) |
To reflect a non-cash charge to operating expense for Research
and Development stock-based compensation. |
| |
(2) |
To reflect a non-cash charge to operating expense for General
and Administrative stock-based compensation. |
| |
(3) |
To reflect a non-cash charge to operating expense for the issuance
of common stock related to a licensing agreement. |
| |
(4) |
To reflect a non-cash charge to other expense for amortization
of debt issuance and discount costs and PIK interest related to the issuance of a note payable. |