aibio4D Molecular Therapeutics signs up to $200.0 million Hercules loan
Tickers FDMT
Hercules Capital, Inc. is the lender on senior secured term loans that mature in 2031, and most of the money is milestone-based or at the lender's discretion. The filing does not say how the company will use the proceeds.
Key facts
- Company
- 4D Molecular Therapeutics, Inc. (NASDAQ: FDMT)
- News type
- Debt Financing
- Primary source
- 4D Molecular Therapeutics, Inc. 8-K (2026-06-29)
Tranches, rates and fees
4D Molecular Therapeutics, Inc. (Nasdaq: FDMT) entered into a Loan and Security Agreement with Hercules Capital, Inc. on June 24, 2026, providing term loans of up to $200.0 million. Only the first tranche is drawn at closing: a Tranche 1A Loan of $20.0 million. A Tranche 1B Loan of $30.0 million is available at the company's election until June 15, 2027.
Two tranches of $12.5 million each, Tranche 2A and Tranche 2B, depend on milestones, as do the $50.0 million Tranche 3 and the $25.0 million Tranche 4. The $50.0 million Tranche 5 is available only in the sole discretion of Hercules.
The Tranche 1A Loan bears interest at the greater of the prime rate reported in The Wall Street Journal plus 2.00% and 8.75%. All other tranches bear the greater of prime plus 2.50% and 9.25%. Interest is payable monthly in arrears. The agreement caps the rate on any advance at 0.75% above the rate in effect on the day that advance was funded. The loans mature on June 1, 2031.
The company must pay an Initial Facility Charge of $500,000 and a Tranche Facility Charge equal to 1.00% of each advance for Tranches 2 through 5. It may prepay in whole or, under certain conditions, in part, but prepayments carry prepayment and exit fees.
Security, covenants and default terms
The loans are secured by substantially all of the company's assets, including its intellectual property.
The minimum cash covenant requires the company to hold cash equal to a specified percentage of its outstanding obligations. Under the 8-K, testing starts on January 1, 2028 if borrowings already exceed $25 million by then, and otherwise on the date they do. If certain milestones are met, the threshold becomes $50 million and testing starts on July 1, 2028 if borrowings exceed $50 million before then. The test does not apply on any day when the company's market capitalization exceeds seven times the outstanding obligations.
If the company makes a cash redemption of any permitted convertible debt, it must keep cash of at least 125% of the outstanding obligations. A performance covenant is tested nine months after FDA approval of the company's lead product candidate, once borrowings reach $75 million. The company must then meet one of three tests: a market capitalization above $750 million with cash of at least 50% of obligations, cash of at least 125% of obligations, or trailing six-month net product revenue of at least 70% of forecast. The 8-K does not name the lead candidate.
After an event of default, the lenders may accelerate the debt, and insolvency-related defaults accelerate it automatically. The full agreement will be filed with the quarterly report on Form 10-Q for the quarter ending June 30, 2026.
Who is named, and what is not
Hercules Capital, Inc. is the lender. The 8-K does not name a placement agent, underwriter, financial advisor or outside counsel for the transaction. It also does not state how the company will use the proceeds.
Programs and business
The company is based in Emeryville, California. Its annual report, filed March 18, 2026, names clinical trials for 4D-150, 4D-175, 4D-710 and 4D-725, and lists relationships with Otsuka Pharmaceutical Co., Ltd. and the Cystic Fibrosis Foundation as collaborations. The loan filing gives no clinical results for these programs, and the annual report passage that names them is a list of forward-looking topics, not data.
Losses, spending and cash
Revenue for 2025 was $85.2 million, against $37,000 in 2024. Research and development expense rose to $195.7 million in 2025 from $141.3 million in 2024. The net loss narrowed to $140.1 million from $160.9 million. Cash used in operations fell to $109.1 million from $134.6 million.
At the end of 2024 the company held $149.3 million in cash and cash equivalents and $275.5 million in short-term investments.
The minimum cash covenant, the 125% requirement and the performance covenant all set a cash floor against the debt, and the filing does not say how the company expects to meet them.