COMPASS Pathways plc 8-K

What Happened
COMPASS Pathways plc announced a Third Amendment to its loan and security agreement with Hercules Capital, Inc., effective January 5, 2026. The amendment creates an Amended Loan Agreement that provides up to $150.0 million of term loans in five tranches, with $50.0 million (Tranche 1) funded at closing. A portion of the Tranche 1 proceeds (~$31.1 million) was used to repay outstanding principal and PIK under the prior loan.

Key Details

• Amended facility: up to $150.0 million in five tranches; $50.0M funded on Jan 5, 2026 (Tranche 1).
• Interest and payments: interest at the greater of 9.75% or (2.75% + WSJ prime); interest-only payments until the first principal payment due in Q1 2029 (may be deferred to maturity Jan 5, 2031 if milestones met).
• Fees and charges: $250,000 facility charge paid at closing; remaining $1.425M end‑of‑term charge payable on earlier of July 1, 2027 or prepayment of Tranche 1; end‑of‑term charge at maturity or prepayment equal to 7.75% of principal repaid. Prepayment permitted >$5M with a declining premium (2.0% first year, 1.0% second year, 0.5% thereafter).
• Security and covenants: facility is secured by most personal property (limited IP and deposit account exclusions); includes cash‑control financial covenants starting July 1, 2026 (adjustable by milestones), and a performance revenue covenant if draws reach $75M and after FDA approval. Lenders have a right to invest up to $5.0M in future financings. Default can trigger a +4.0% default interest rate and acceleration of obligations.

Why It Matters
This amendment provides immediate liquidity ($50M funded) and access to as much as $150M in additional financing tied to milestones, and it repaid roughly $31.1M of prior indebtedness. For investors, that means more near‑term cash flexibility but also higher secured debt and meaningful contractual restrictions: relatively high interest costs, fees, cash‑control provisions and revenue‑based covenants that could limit operational flexibility or affect future financings. The company now carries increased debt-related obligations and covenants that investors should monitor alongside clinical and commercial milestones that affect future tranche availability and covenant timing.