UNITED STATES
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FORM
CURRENT REPORT
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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.
As previously disclosed, on November 7, 2020 Arcturus Therapeutics Holdings Inc. (the “Company”), entered into a Manufacturing Support Agreement (the “Support Agreement”) with the Economic Development Board of the Republic of Singapore (the “EDB”) pursuant to which the EDB agreed to make a term loan of up to $45.0 million (subject to adjustment based on exchange rates) to the Company, subject to the satisfaction of customary deliveries, to support the development of the LUNAR-COV19 vaccine candidate (the “Singapore Loan”). The Company elected to draw down the full amount available under the Support Agreement and $46.5 million (as a result of applicable exchange rates) was funded by the EDB on January 29, 2021.
Subject to certain exceptions, the Singapore Loan is a limited recourse loan that is intended to be repaid solely through a royalty payment on sales of the LUNAR-COV19 vaccine candidate, with a portion of the proceeds on all such vaccine sales being applied on a quarterly basis to prepay outstanding principal and interest under the Singapore Loan. However, all unpaid principal and interest under the Singapore Loan will be due and payable five years after draw date, if net sales of the LUNAR-COV19 vaccine exceed a certain minimum threshold during this five year period or the Company obtains clearance to sell the vaccine in specified jurisdictions. Unpaid principal and interest under the Singapore Loan will also become due and payable upon an event of default under the Support Agreement
If any portion of the Singapore Loan is required to be forgiven pursuant to the terms of the Support Agreement, the EDB has the right to take ownership of certain raw materials and equipment that were purchased by the Company with proceeds of the Singapore Loan (the “Specified Assets”) and entered into a security agreement for the benefit of the EDB to provide that repayment of the Singapore Loan and related obligations are secured by a lien on the Specified Assets.
The foregoing description of the Support Agreement does not
purport to be complete and is qualified in its entirety by reference to the full text of the Support Agreement, which was filed
as an exhibit to the Quarterly Report on Form 10-Q filed by the Company on November 9, 2020.
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.
| Arcturus Therapeutics Holdings Inc. | ||||||
| Date: February 3, 2021 | ||||||
| By: |
/s/ Joseph E. Payne | |||||
| Name: | Joseph E. Payne | |||||
| Title: | Chief Executive Officer | |||||