MARIETTA, Ga., April 21, 2020 (GLOBE NEWSWIRE) -- MiMedx Group, Inc. (OTC PINK: MDXG), an industry leader in advanced wound care and an emerging therapeutic biologics company, today announced that it has received notice from Bank of America that its application for a Paycheck Protection Program loan (a “PPP Loan”) under the CARES Act has been approved. The Company expects to receive the funds from the PPP Loan by the end of the month. In addition, the Company has agreed to terms for an amendment to its Loan Agreement, dated as of June 10, 2019, with Blue Torch Finance LLC (“Blue Torch”), to modify certain covenant terms in the original Term Loan Facility. Both the PPP Loan and the Blue Torch amendment would provide the Company with the additional capital and financial flexibility needed to support business operations in the midst of the current economic period.
Timothy R. Wright, MiMedx Chief Executive Officer, said: “Like other businesses, MiMedx is working to navigate the impacts of the COVID-19 pandemic. The additional capital available through these financing agreements would support the ongoing operations of the Company and reduce risk during this period of economic uncertainty.”
The PPP Loan application was for the maximum $10 million available under the program based on the Company’s North American Industry Classification System (NAICS) Code, Surgical Appliance and Supplies Manufacturing, and its categorization as a company with less than 750 total employees. As of the date of application and the date of this release, the Company employed approximately 710 full time personnel. The Company intends to use the proceeds from the PPP Loan in a manner that would allow for forgiveness of the entire amount of the loan, although there is no assurance that the proceeds of the PPP Loan will be forgiven.
In addition, the Company has agreed to terms for an amendment to its Term Loan Agreement with Blue Torch. Among other things, the amendment would provide for an increase in the maximum Total Leverage Ratio (as defined in the Term Loan Agreement), which is a quarterly test, for the remainder of 2020, and also would provide for a reduction in the minimum Liquidity (as defined in the Term Loan Agreement) requirement from April 2020 through and including November 2020. Specifically, the maximum Total Leverage Ratio would increase from 3 to 1 to 5 to 1 through December 31, 2020. The minimum Liquidity requirement would be reduced from $40 million to $20 million for April and May 2020, and from $30 million to $20 million for June through November 2020. In connection with the amendment, the Company would agree to pay a one-time fee of approximately $725,000, added to the principal balance, and a 1 percentage point increase in the interest rate to LIBOR plus 9%.
About MiMedx
MiMedx® is an industry leader in advanced wound care and an emerging therapeutic biologics company developing and distributing human placental tissue allografts with patent-protected processes for multiple sectors of healthcare. The Company processes the human placental tissue utilizing its proprietary PURION® process methodology, among other processes, to produce allografts by employing aseptic processing techniques in addition to terminal sterilization. MiMedx has supplied over 1.8 million allografts to date. For additional information, please visit www.mimedx.com.
