Item 1.01. Entry into a Material Definitive Agreement.
MidCap Funding X Trust
As previously reported by Twinlab Consolidated Holdings, Inc. (the “Company”), the Company and its direct and indirect wholly owned subsidiaries, Twinlab Consolidation Corporation ("TCC"), Twinlab Holdings, Inc. ("THI"), Twinlab Corporation ("Twinlab"), ISI Brands Inc. ("ISI"), NutraScience Labs, Inc. ("NSL"), NutraScience Labs IP Corporation ("NSLIP"), Organic Holdings LLC ("Organic"), Reserve Life Organics, LLC ("Reserve"), Resvitale, LLC ("Resvitale"), Re-Body, LLC ("Re-Body"), Innovitamin Organics, LLC ("Innovitamin"), Organics Management LLC ("Organics Mgmt."), Cocoawell, LLC ("Cocoawell"), Fembody, LLC ("Fembody"), Reserve Life Nutrition, L.L.C. ("Reserve Life"), Innovita Speciality Distribution, LLC ("Innovita") and Joie Essance, LLC ("Joie" and with the Company, TCC, THI, Twinlab, ISI, NSL, NSLIP, Organic, Reserve, Resvitale, Re-Body, Innovitamin, Organics Mgmt., Cocoawell, Fembody, Reserve Life and Innovita, collectively, the "Twinlab Companies"), entered into a Credit and Security Agreement, dated January 22, 2015, with MidCap Financial Trust ("MidCap Trust"), with respect to which Credit and Security Agreement and all related agreements MidCap Trust immediately thereafter assigned all of its rights and interests to MidCap Funding X Trust, an affiliate of MidCap Trust (as so assigned and subsequently amended by that certain Amendment No. 1 to Credit and Security Agreement and Limited Consent, dated as of February 4, 2015, that certain Amendment No. 2 to Credit Agreement and Limited Consent dated as of April 7, 2015, that certain Amendment No. 3 to Credit and Security Agreement and Limited Consent dated as of April 30, 2015, that certain Amendment No. 4 to Credit and Security Agreement and Limited Waiver dated as of June 30, 2015, that certain Amendment No. 5 to Credit and Security Agreement and Limited Consent, dated as of June 30, 2015, that certain Amendment No. 6 to Credit and Security Agreement, Limited Consent and Limited Waiver dated as of September 9, 2015, that certain Amendment No. 7 and Joinder Agreement to Credit and Security Agreement dated as of October 5, 2015, that certain Amendment No. 8 to Credit and Security Agreement dated as of January 28, 2016, that certain Amendment No. 9 to Credit and Security Agreement, dated as of April 5, 2016, that certain Amendment No. 10 to Credit and Security Agreement dated as of August 11, 2016, that certain Amendment No. 11 to Credit and Security Agreement dated as of September 1, 2016, that certain Amendment No. 12 to Credit and Security Agreement dated as of December 2, 2016, that certain Amendment No. 13 to Credit and Security Agreement dated as of August 30, 2017, that certain Amendment No. 14 to Credit and Security Agreement dated as of March 22, 2018, that certain Amendment No. 15 to Credit and Security Agreement, dated as of December 4, 2018, and that certain Amendment No. 16 to Credit and Security Agreement, dated as of January 22, 2019 (the "Credit Agreement"). On February 13, 2019, MidCap informed the Twinlab Companies that MidCap Trust had re-assigned all of its rights, powers, privileges and duties as “Agent” under the Credit and Security Agreement, as well as all of its right, title and interest in and to the revolving loans made under the facility to MidCap IV Funding ("MidCap").
On April 22, 2019, the Twinlab Companies and MidCap entered into Amendment No. 17 to Credit and Security Agreement and Limited Waiver (the "MidCap Seventeenth Amendment"). Pursuant to the MidCap Seventeenth Amendment, the existing Credit and Security Agreement was renewed between the parties and the Revolving Loan Commitment Amount (as defined in the MidCap Seventeenth Amendment) was increased from a total of $5,000,000 to a total of $12,000,000. In addition, MidCap granted a waiver with respect to the Twinlab Companies' failure to satisfy Section 6.2 (Minimum Adjusted EBITDA) of the Credit Agreement because Twinlab Companies’ Adjusted EBITDA was less than $1,400,000 with respect to the measurement period from January 1, 2018 to December 31, 2018. The waiver is limited to the measurement period.
Subsequent to entering into the MidCap Seventeenth Amendment, the Company issued a warrant to MidCap exercisable for up to 500,000 shares of Company common stock at an exercise price of $.76 per share (the "MidCap Warrant”). The Company has reserved 500,000 shares of Company common stock for issuance under the MidCap Warrant. The MidCap Warrant expires on April 22, 2021.
The MidCap Warrant is also subject to customary adjustments upon any recapitalization, capital reorganization or reclassification, consolidation, merger or transfer of all or substantially all of the assets of the Company.
The foregoing description of the MidCap Seventeenth Amendment and the MidCap Warrant are qualified in their entirety by reference to the full text of such documents, which documents will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the first quarter of 2019 ended March 31, 2019.