aibioTriSalus Life Sciences receives $10 million second loan tranche, issues warrants for 91,263 shares
Tickers TLSI
The Second Tranche loan matures on April 30, 2029. Warrants issued to the initial lender and its affiliate carry an exercise price of $5.4787 and a term of 7 years.
Key facts
- Company
- TriSalus Life Sciences, Inc. (NASDAQ: TLSI)
- News type
- Financings
- Primary source
- TriSalus Life Sciences, Inc. Form 8-K filed February 19, 2025 (SEC EDGAR)
TriSalus Life Sciences, Inc. (Nasdaq: TLSI) drew the $10 million second tranche of its OrbiMed credit facility on February 18, 2025, and issued warrants to the lender in connection with the draw. The company disclosed the closing in a Form 8-K filed February 19, 2025, under Items 2.03 and 3.02. Chief Financial Officer James Young signed the report.
The lender and the facility
The 8-K recalls the credit agreement first reported on April 30, 2024. The parties are TriSalus Life Sciences, Inc. as parent; its wholly owned subsidiary TriSalus Operating Life Sciences, Inc. as borrower; and OrbiMed Royalty & Credit Opportunities IV, LP, a Delaware limited partnership, as initial lender. OrbiMed Royalty & Credit Opportunities IV, LP is also the administrative agent for the lenders. The filing names no bank, placement agent or outside counsel for the facility.
The agreement provides for a five-year senior secured credit facility of up to $50 million. TriSalus borrowed $25 million on the April 30, 2024 closing date. Up to $10 million, the second tranche, was available on or before June 30, 2025, and up to $15 million, the third tranche, is available on or before December 31, 2025. Each tranche depends on the company meeting certain revenue requirements.
The second tranche loan matures on April 30, 2029. The filing says the third tranche remains available under the terms of the credit agreement. The 8-K does not state the interest rate, the revenue thresholds or the financial covenants, and it does not say how the company will use the $10 million.
The warrants
On February 18, 2025, under the credit agreement, TriSalus issued the initial lender and its affiliate warrants for an aggregate of 91,263 shares of common stock. The exercise price is $5.4787 a share, and the warrants run for 7 years from issuance. The filing says they contain customary participation rights and share and price-based adjustment provisions, so the share count and price can change. The company is also subject to registration requirements for the underlying shares, as disclosed in the April 2024 report.
The shares underlying the warrants will be issued under the exemption in Section 4(a)(2) of the Securities Act of 1933 and Rule 506 of Regulation D. Neither has been registered.
The company's position
The company's annual report for 2023, filed April 11, 2024, before the facility was signed, reports net losses of $59.0 million for 2023 and $47.2 million for 2022, and an accumulated deficit of $248.4 million at December 31, 2023. The auditor's report on the 2023 statements includes an explanatory paragraph expressing substantial doubt about the company's ability to continue as a going concern, and management independently reached the same conclusion.
Management estimated that cash and cash equivalents at December 31, 2023 would be insufficient to fund projected liquidity needs for the next 12 months. The report also warns that, while that doubt remains, investors or other lenders may be unwilling to provide funding on commercially reasonable terms, or at all.
The business
The annual report describes TriSalus as a commercial-stage medical device company and a Phase I clinical-stage pharmaceutical company. Its two lines are Pressure Enabled Drug Delivery, or PEDD, infusion systems, which are in use today, and nelitolimod, an investigational agent the company says shows potential to enhance immune response in hepatocellular cancer, pancreatic cancer and other solid tumors in the liver.
Revenue comes mainly from the TriNav device, and the report says the company is highly dependent on it. It also says TriNav faces an uncertain reimbursement environment, and that a cut in reimbursement could cause sales to decline materially. The Dynavax agreement, signed when the company bought nelitolimod, requires potentially significant payments to Dynavax.
What comes next
The next step in the facility is the third tranche of up to $15 million, available on or before December 31, 2025, if the revenue requirements are met. Each draw adds senior secured debt to a company that reported a going-concern warning and has not shown a profit. The second tranche is due April 30, 2029, and the warrants expire 7 years after February 18, 2025.