| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 20, 2024 (the “Effective Date”), TScan Therapeutics, Inc. (the “Company”) entered into a Loan and Security Agreement (the “New Loan Agreement”) with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Lender”). Under the New Loan Agreement, the Lender will extend up to $52,500,000 in a term loan facility, consisting of a first tranche of $32,500,000 fully funded on the Effective Date (the “Term A Loan Advance”) and a second tranche of $20,000,000 to be available to the Company at the Lender’s sole discretion on or prior to June 30, 2026.
The proceeds of the Term A Loan Advance funded on the Effective Date under the New Loan Agreement were used to refinance all outstanding obligations under the Company’s Existing Loan Agreement (as defined in Item 1.02 below) and with the remainder to be used for general corporate purposes.
The term loans will mature on September 1, 2029, and will be subject to monthly interest only payments until September 30, 2027, so long as the Company achieves certain financial and clinical milestones, following which the term loans will amortize in equal monthly installments until maturity. If the Company does not achieve such financial and clinical milestones by June 30, 2026, the maturity date will be September 1, 2028, and the interest-only period will end on September 30, 2026, following which the term loans will amortize in equal monthly installments until maturity.
The term loans will accrue interest at a per annum rate equal to the greater of (i) 7.00% and (ii) the prime rate (as last quoted in The Wall Street Journal), minus 0.75%; provided that such interest rate shall not exceed 9.75% per annum. The Company will be liable for a final payment that is due on the earliest to occur of (a) the maturity date, (b) the repayment of the term loans in full, and (c) the date upon which the term loans are accelerated by the Lender, in an amount equal to the aggregate original principal amount of the term loans extended by the Lender to the Company, multiplied by 5.0%. In addition, the Company will be liable for a prepayment fee equal to (x) 3.0% of the principal amount of term loans prepaid during the first year of the term, (y) 2.0% of the principal amount of term loans prepaid during the second year of the term, and (z) 1.0% of the principal amount of term loans prepaid thereafter. The term loans will automatically accelerate upon the occurrence of a bankruptcy or insolvency event involving the Company or its subsidiaries.
The New Loan Agreement contains customary representations and warranties, events of default and affirmative and negative covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to, among other things, dispose of assets, make changes to its business, management, ownership or business locations, merge or consolidate, incur additional indebtedness, grant liens on its assets, pay dividends or other distributions, repurchase equity, make investments, and enter into certain transactions with affiliates, in each case subject to certain thresholds and exceptions. The New Loan Agreement does not require the Company to comply with a financial maintenance covenant. As collateral for its obligations under the New Loan Agreement, the Company granted the Lender a first-priority security interest on substantially all of the Company’s assets (other than intellectual property), subject to certain exceptions. The Company’s obligations under the New Loan Agreement will be guaranteed by each of the Company’s future direct or indirect subsidiaries, subject to certain exceptions.
The above description of the New Loan Agreement does not purport to be complete and is qualified by reference to the full text of the New Loan Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.
| Item 1.02 | Termination of Material Definitive Agreement. |
On December 20, 2024, in conjunction with the entry into the New Loan Agreement described in Item 1.01 above, the Company repaid all outstanding obligations, totaling $17.2 million, and terminated its Loan and Security Agreement dated as of September 9, 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Existing Loan Agreement”), among the Company, as borrower, the lenders party thereto, K2 HealthVentures LLC, as administrative agent for the lenders, and Ankura Trust Company, LLC, as collateral agent for lenders. As a result of the termination, all credit commitments thereunder have been terminated and all security interests and guarantees executed in connection with the Existing Loan Agreement were released. The Company paid an exit fee and prepayment premium in an aggregate amount of $2.1 million.
