NEW YORK — Point-of-care test developer Chembio Diagnostics said today that it has closed a $20 million term loan with an affiliate of healthcare investor Perceptive Advisors.
The firm anticipates using the proceeds to fund its pursuit of three corporate priorities — expanding commercialization, including broadening its product portfolio and geographic reach; advancing its research and development pipeline, including building out its infectious disease product line and leveraging its platform technology to develop point-of-care companion diagnostic, biothreat, and neurological tests; and preparing for additional growth, including consolidating and expanding its facilities and automating manufacturing in the US.
The loan strengthens Medford, New York-based Chembio's balance sheet while limiting dilution effects for current shareholders, its CEO John Sperzel said in a statement, adding, "This capital provides flexibility to grow our business as we advance toward our 2023 revenue target of $100 million."
No principal payments are required during the initial three years of the loan, which bears interest at an annual rate of 8.75 percent plus the greater of the one-month London Inter-bank Offered Rate (LIBOR) or 2.5 percent. As part of the transaction, Chembio issued to Perceptive Advisors a seven-year warrant to purchase 550,000 shares of Chembio common stock at an exercise price of $5.22.
Craig-Hallum Capital Group was the exclusive financial advisor to Chembio for the transaction.