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Cancer Genetics Renegotiates Credit Agreement with Wells Fargo

NEW YORK (GenomeWeb News) – Cancer Genetics today announced a renegotiated credit agreement with Wells Fargo.

The agreement, entered into on April 1, provides Cancer Genetics with a maximum borrowing amount of $6 million, which was fully drawn as of April 1, it said in a document filed with the US Securities and Exchange Commission. The line was extended through April 1, 2016 at an interest rate of LIBOR plus 1.75 percent.

Under Cancer Genetics' previous line of credit with the bank, substantially all of the company's assets and intellectual property were pledged as collateral. Under the new credit agreement, the pledge of its assets and IP, as well as a guarantee by John Pappajohn — the company's chairman and its largest shareholder — have been released. Instead, the firm restricted $6 million in cash as collateral.

Cancer Genetics said that it is required to maintain limits on capital spending and is limited to how much it can pledge as collateral for additional loans.