Codexis has replaced its existing debt with a new loan facility from Trinity Capital that provides up to $60 million. The company drew $42.5 million at closing on November 5 and used those proceeds, along with cash on hand, to repay its prior lender, Innovatus.
The refinancing gives Codexis access to additional borrowing, but the new debt carries a high interest rate, is secured by substantially all company assets, and includes warrants that could add shares to the stock count if exercised.
Key details
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$42.5 million funded upfront; up to $17.5 million more available. A further $7.5 million may be borrowed through December 15, 2027, subject to customary conditions and a limit tied to Codexis’s market capitalization. Another $10 million may be borrowed through the interest-only period, but only with lender approval.
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Interest starts at 10.5% a year. The rate is variable and is the greater of 10.5% or the Wall Street Journal prime rate, capped at 8%, plus 3.75%. Codexis also owes a commitment fee equal to 1% of each loan tranche funded.
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Repayment is scheduled to begin in 2030. Monthly payments are interest-only through November 1, 2030. If no event of default or potential default has occurred by then, the interest-only period extends to the November 1, 2031 maturity date. Otherwise, the loans are scheduled to amortize in equal monthly installments of principal and interest from November 2030 through maturity.
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There are additional costs for early repayment and at maturity. Codexis must pay an end-of-term amount equal to 5% of the principal funded. Voluntary prepayment carries a premium of 3% during the first year, 2% during the second year and 1% thereafter. A change of control also requires repayment, along with the applicable premium and other amounts due.
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The debt is secured by nearly all of Codexis’s assets, including intellectual property. The agreement also restricts certain actions, including taking on additional debt, placing liens on assets, making investments or distributions, and completing mergers or acquisitions, subject to specified exceptions.
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A liquidity test applies if Codexis’s market capitalization falls below $400 million. In that case, the company must maintain liquidity at least equal to the outstanding loan principal. A 60-day cure period is available no more than twice in any rolling 12-month period, and not if liquidity falls below 90% of the amount owed.
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The agreement includes stock-price and other default triggers. Among the specified triggers are a stock delisting, a stock-price decline of 95% or more from its November 5 level that lasts 30 consecutive days, certain cross-defaults and a material adverse change. Following an uncured default, the lender may accelerate repayment, and the interest rate may rise by four percentage points.
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Lenders received warrants for up to 1,666,668 shares at $1.08 per share. Warrants vest as loan tranches are funded. The initial $42.5 million draw caused warrants for 1,180,556 shares to vest; warrants tied to any additional borrowing vest only if that borrowing is funded. Vested warrants remain outstanding even if the debt is repaid or refinanced. They expire on November 5, 2036 and may be exercised without paying cash.
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The Innovatus debt has been paid off. Codexis paid approximately $43.6 million, including principal, accrued interest, fees and expenses. The company’s obligations under that loan were discharged and the related liens released. Warrants previously issued to Innovatus remain outstanding under their existing terms.
What changes for investors
Codexis has retired its Innovatus borrowing and replaced it with a new facility that has a $42.5 million initial draw and up to $17.5 million of conditional additional capacity. The new arrangement also places substantially all assets, including intellectual property, behind the debt, imposes liquidity and other operating restrictions, and creates potential share dilution through the lender warrants.