Celcuity Inc. — Regulatory Filings 2022

Dec 23, 2022

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 22, 2022

Celcuity Inc.

(Exact name of Registrant as Specified in its Charter)

Delaware	001-38207	82-2863566
(State
or Other Jurisdiction of
Incorporation)	(Commission File
Number)	(IRS
Employer Identification
No.)

16305 36th Avenue North; Suite 100 Minneapolis , Minnesota 55446

(Address of Principal Executive Offices and Zip Code)

(763) 392-0767

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

| ☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| --- | --- |
| ☐ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |

Securities registered pursuant to Section 12(b) of the Act:

| Title
of each class | Trading
Symbol(s) | Name
of each exchange on which registered |
| --- | --- | --- |
| Common
Stock, $0.001 par value per share | CELC | The
Nasdaq Stock Market LLC |

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On December 22, 2022, Celcuity Inc. (the “Company”) closed on a $20.0 million term loan (the “Term B Loan”) from Innovatus Life Sciences Lending Fund I, L.P., a Delaware limited partnership (“Innovatus”), pursuant to a Loan and Security Agreement, dated April 8, 2021 (the “Loan Agreement”), as amended by that First Amendment to Loan and Security Agreement, dated August 9, 2022 (the “Amendment and collectively with the Loan Agreement, the “Amended Loan Agreement”). The Company became eligible to draw down the Term B Loan upon the closing of the Company’s previously disclosed $100 million private placement on December 9, 2022.

As previously disclosed, the Amended Loan Agreement may provide the Company with up to $75.0 million through funding of up to five term loans. Funding of the first $15.0 million term loan occurred on April 8, 2021 in connection with entering into the original Loan Agreement.

The loans will mature on April 8, 2027, the sixth anniversary of the initial funding date, provided that the lender may accelerate and cause the loans to become immediately due and payable upon the occurrence of customary events of default as described in the Amended Loan Agreement which include, among others, failure to make any payment of principal or interest on its due date and breach of financial and other covenants.

The term loans bear interest at a rate equal to the sum of the greater of (i) the prime rate or (ii) 3.25%, plus 5.70%. The Company has the option to prepay the loans at any time following August 9, 2023, the first anniversary of the Amendment date, with tiered prepayment fees ranging from 0.00 – 1.00% of the prepayment amount based on when the prepayments occur. Upon a change of control or event of default, mandatory prepayment will be required, and if such an event occurs prior to the first anniversary of the Amendment date, an additional prepayment fee of 3.0% applies. The Company is entitled to make interest only payments until May 1, 2025 or, if certain conditions are met, May 1, 2026. The Company has elected to make 4.95% of the interest rate as payable in-kind, which will accrue monthly as additional principal.

The Amended Loan Agreement includes certain other fees, such as a final fee of 4.5% of the funded loan amounts not converted into equity by the lender, which apply if prepayment, an event of default, or change of control occurs prior to August 9, 2025, the third anniversary of the Amendment date. Subject to certain other conditions, no final fee will be payable after August 9, 2025 if the terms loans are not prepaid prior thereto.

Under the Amended Loan Agreement, Innovatus has the right, at its election and until August 9, 2025, the third anniversary of the Amendment date, to convert up to $6.6 million of outstanding principal into Company common stock, assuming all term loans are funded (the “Conversion Rights”). These Conversion Rights include the right to convert up: (i) 20.00% of the outstanding principal amount of the initial term loan that funded April 8, 2021, and (ii) an additional 7.00% of the amount by which the aggregate principal amount of the other term loans that are funded exceed $35 million, provided that the aggregate outstanding principal amount of all term loans funded under the Amended Loan Agreement is at least $35 million. The number of shares of common stock issuable upon exercise of the Conversion Rights will be based upon a price of $10.00 per share.

The Amended Loan Agreement is secured by all assets of the Company. Proceeds will be used for working capital purposes and to fund the Company’s general business requirements. The Amended Loan Agreement contains customary representations and warranties and covenants, subject to customary carve outs, and includes financial covenants related to or based upon liquidity, trailing twelve months revenue and the funded loan amounts.

The description of the Loan Agreement, as amended by the Amendment, contained herein does not purport to be complete and is qualified in its entirety by reference to the complete text of the Loan Agreement, which was included as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2021, and the Amendment, which was included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 11, 2022, each of which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 23, 2022

| CELCUITY
INC. | |
| --- | --- |
| By | /s/
Brian F. Sullivan |
| | Brian
F. Sullivan |
| | Chief
Executive Officer |

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