INSTITUTE OF ONCOLOGY, INC. such as entering into a material definitive agreement, creating a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant, unrecorded sale of equity securities, FD settlement disclosure, financial statements and parts (Form 8-K)
Section 1.01 Entering into a Material Definitive Agreement.
Credit Agreement, Convertible Bonds, Warrants
August 9, 2022, The Oncology Institute, Inc., a Delawarecorporation (the "Company"), entered into a Facility Agreement (the "Facility Agreement") by and among the Company, as borrower, certain of the Company's subsidiaries from time to time party thereto as guarantors and Deerfield Partners, L.P.("Deerfield"), as agent for itself and the lenders, providing for the issuance and sale by the Company to Deerfield of $110 millionof principal amount of 4.0% secured senior convertible notes (the "Convertible Notes") upon the terms and conditions set forth in the Facility Agreement (the "Deerfield Financing"). The Convertible Notes will be secured by (i) a security interest in substantially all of the assets of the Company and its subsidiaries and (ii) a pledge by the Company of the equity interest of all its direct and indirect subsidiaries and will mature on August 9, 2027, unless earlier converted or redeemed, and are convertible into shares of the Company's common stock, par value $0.0001per share (the "Common Stock"), at an initial conversion price of $8.567per share, representing an approximately 30% premium over the Company's closing stock price of $6.59per share on August 8, 2022. The Convertible Notes were issued in a private placement to Deerfield pursuant to an exemption for transactions by an issuer not involving a public offering under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). The Company estimates that the net proceeds from the sale of the Convertible Notes were approximately $107 millionafter deducting the estimated expenses payable by the Company. The Company plans to use the proceeds from the Convertible Notes for potential future acquisitions and general corporate purposes. The Convertible Notes bear interest at 4.0% per annum, payable quarterly in arrears commencing on October 1, 2022and on the first business day of each January, April, July and October thereafter. The Convertible Notes are convertible at any time at the option of the holders thereof; provided that Deerfield is prohibited from converting the Convertible Notes into shares of Common Stock if, upon such conversion, the converting holder (together with certain affiliates and "group" members) would beneficially own more than 4.9% of the total number of shares of Common Stock then issued and outstanding (the "Beneficial Ownership Cap"). Holders of the Convertible Notes have the option to demand repayment of all outstanding principal, any unpaid interest accrued thereon, and make-whole interest in connection with a Major Transaction (as defined in the Convertible Notes), which includes, among other events, certain acquisitions or other changes of control of the Company; certain sales or transfers of assets of the Company; a liquidation, bankruptcy or other dissolution of the Company; or if at any time shares of the Company's Common Stock are not listed on an Eligible Market (as defined in the Convertible Notes). The Convertible Notes will be secured by (i) a security interest in substantially all of the assets of the Company and its subsidiaries and (ii) a pledge of the equity interests of the Company's direct and indirect subsidiaries. The Facility Agreement contains certain specified events of default, the occurrence of which would entitle the holders of the Convertible Notes to immediately demand repayment of all outstanding principal and accrued interest on the Convertible Notes, together with a make-whole payment as determined pursuant to the Facility Agreement. Such events of default include, among others, failure to make any payment under the Convertible Notes when due, failure to observe or perform any covenant under the Facility Agreement or the other transaction documents related thereto (subject in certain cases to specified cure periods), the failure of the Company to be able to pay debts as they come due, the commencement of bankruptcy or insolvency proceedings against the Company, a material judgment levied against the Company and a material default by the Company under other indebtedness. The Facility Agreement also provides for the issuance of warrants to purchase Common Stock (the "Warrants") to the extent that the obligations under Facility Agreement and the Convertible Notes are prepaid. If issued, the Warrants will be exercisable on a cash or cashless (net exercise) basis, and will be subject to the Beneficial Ownership Cap, as well as certain other customary anti-dilution adjustments upon the occurrence of certain events such as stock splits, subdivisions, reclassifications or combinations of Common Stock. The Warrants will also provide, at the election of each holder thereof, for the payment of the exercise price therefor by reduction of the principal amount of any outstanding Convertible Notes held by such holder. Upon the consummation of a "Major Transaction" (as defined in the Warrants), holders of the Warrants may elect to (i) have their Warrants redeemed by the Company for an amount equal to the Black-Scholes value of such Warrant, in cash or, if applicable, in the form of the consideration paid to the Company's stockholders in a Major Transaction, or (ii) have such Warrants be assumed by the successor to the Company in a Major Transaction, if applicable. Holders of the Warrants are also entitled to participate in any dividends or distributions to holders of Common Stock at the time such dividends or distributions are paid to such stockholders. If issued, the Warrants and the shares of Common Stock issuable upon their exercise will be issued in a private placement pursuant to Section 4(a)(2) of the Securities Act in transactions not involving a public offering (or, in the case of the issuance of shares of common stock pursuant to certain non-cash . . .
Item 2.03 Creation of a Direct Financial Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information included in Section 1.01 above under the heading “Facility Agreement and Convertible Securities” is incorporated by reference into this Section 2.03.
Item 3.02 Unrecorded Sales of
The information included in Section 1.01 above under the heading “Facility Agreement, Convertible Bonds, Warrants” is incorporated by reference into this Section 3.02.
Section 7.01. FD Regulation Disclosure
The information included in this Form 8-K under this Item 7.01 (including Exhibit 99.1) shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the company or the operating partnership under the Exchange Act or the Securities Act, except as shall be expressly set forth by specific reference in such a filing.
Section 9.01. Financial statements and supporting documents.
d) The following documents are filed herewith:
Exhibit No. Description 4.1 F orm of Secured Convertible Note 4.2 Form of Warrant 10.1† Facility Agreement, dated as of August 9, 2022,
by and among The Oncology
Institute, Inc.and Deerfield Partners LP10.2 Registration Rights Agreement, dated as of August
9, 2022, by and among Le
Oncology Institute, Inc. and Deerfield Partners LP 10.3† Registration Rights Consent, Amendment,
dated as of August 9 , 2022, by and among
Design Fund IV, L.P., Deerfield Partners, L.P., M33
and Oncology Care Partners, LLC. 99.1 Press release issued by The Oncology Institute, Inc. on August 9 , 2022 † Certain of the exhibits and schedules to this
The piece was omitted from
accordance with Regulation S-K Item 601(a)(5). The
The holder agrees to
furnish a copy of all omitted exhibits and
schedules at the
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