aibioMind Medicine (MindMed) Inc. (now Definium Therapeutics, Inc.) refinances with $42.0 million loan
Tickers DFTX
The company refinanced its K2 HealthVentures term loans with a $42.0 million first tranche, cut the interest rate and gave lenders the right to convert up to $7.0 million into shares. Up to $120.0 million is available in total, but the filing reports only the first tranche as funded.
Key facts
- Company
- Definium Therapeutics, Inc. (NASDAQ: DFTX)
- News type
- Debt Financing
- Primary source
- Definium Therapeutics, Inc. Form 8-K filed April 21, 2025 (SEC EDGAR)
Mind Medicine (MindMed) Inc. refinanced its term loans on April 18, 2025, with a new $42.0 million first tranche funded that day. The amended loan agreement allows up to $120.0 million in total, but only the first tranche is funded. The company disclosed the deal in a Form 8-K filed April 21, 2025.
What the filing says
The company and certain subsidiaries signed the First Amendment to a Loan and Security Agreement dated August 11, 2023, as co-borrowers. K2 HealthVentures LLC is administrative agent and Canadian collateral agent for the lenders. Ankura Trust Company, LLC is collateral trustee.
The company used part of the $42.0 million tranche that day to repay in full all term loans outstanding under the earlier agreement, and to pay fees and expenses for the amendment and the refinancing. Repaid term loans may not be reborrowed.
Remaining tranches and conditions
Subsequent tranches totaling up to $28.0 million depend on time-based clinical and regulatory milestones. An additional tranche of up to $50.0 million is available at the company's request, subject to the lenders reviewing certain information and giving discretionary approval.
Terms and covenants
The amendment decreases the interest rate on all term loans to the greater of 10.25% and the Prime Rate as reported in The Wall Street Journal plus 2.75% a year. The loans mature April 1, 2029, which may be extended to October 1, 2029 if certain events occur. The obligations are secured by substantially all of the borrowers' assets, excluding intellectual property.
If any term loan other than the first tranche is made, a minimum liquidity covenant applies. It starts on the earlier of July 1, 2026 and the date certain clinical and regulatory milestones are not achieved. The July date may move to July 1, 2027 if the company reaches certain fundraising milestones. The covenant is waived in any period when the company's market capitalization exceeds $500 million.
The agreement limits the borrowers' ability to dispose of assets, change their business, management or ownership, merge or consolidate, incur debt or liens, pay dividends or repurchase equity, and make investments. Events of default include a change in control. After an event of default, amounts may be accelerated, and a bankruptcy event makes them due automatically.
Conversion right and share issuance
The lenders may convert up to $7.0 million of the outstanding term loans into common shares at any time before full repayment. Conversion prices range from $4.01 to $9.00 per share and adjust for events such as dividends and share distributions. The lenders also receive piggyback registration rights.
The company reports the conversion shares under Item 3.02 and says they will be issued in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D.
Other than the refinancing, the company expects to use the proceeds for working capital, general corporate purposes, commercial activities and business development. Any tranche beyond the first depends on milestones or lender approval, so the funded amount is $42.0 million for now.
The company behind the loan
The company's 2024 annual report describes it as a clinical-stage pharmaceutical company that has never generated revenue and will require substantial additional capital. Its lead candidate, MM120, is a form of lysergide (LSD) in development for generalized anxiety disorder and major depressive disorder. The company says its Phase 2b trial in anxiety met its primary endpoint in December 2023 and that the FDA granted breakthrough designation in March 2024. Phase 3 work in anxiety is ongoing, and a Phase 3 program in depression is planned. A phase 2b result is not proof that the Phase 3 trials will succeed.
Who signed
The 8-K is dated April 21, 2025, and reports the amendment as effective April 18, 2025. Chief Executive Officer Robert Barrow signed it. Mark Sullivan, Chief Legal Officer and Corporate Secretary, signed the amendment for each borrower, which include Mind Medicine, Inc. and HealthMode, Inc.