Vericel Corp 8-K, filed Feb 2, 2022
Vericel Corp (VCEL)
About this 8-K
Vericel Corp filed this 8-K on February 2, 2022, reporting on events of January 28, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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Item 1.01 Entry into a Material Definitive Agreement.
On January 28, 2022, Vericel Corporation (the “Company”) entered into a Lease Agreement (the “Lease”) with NBD Property Owner 2, L.P. (the “Landlord”) to lease approximately 125,749 square feet of to-be-constructed manufacturing, laboratory and office space at 25 Network Drive, Burlington, Massachusetts (the “Premises”). Once constructed, the Premises will serve as the Company’s new corporate headquarters and primary manufacturing facility.
The term of the Lease is scheduled to begin 12 months following the Landlord’s commencement of construction of the core and shell of the building in which the Premises is located, which is currently expected to be February 28, 2023 (the “Commencement Date”). The Company’s obligation to pay rent for the Premises will begin on the earlier of: 13 months from the Commencement Date; or the date on which the Company first occupies the Premises to conduct operations (the “Rent Commencement Date”). The initial term of the Lease is 144 months following the Rent Commencement Date. The Company has a one-time option to extend the term of the Lease for an additional 120 months upon prior notice to the Landlord.
The annual base rent of the Lease is initially $57 per square foot per year, subject to annual increases of 2.5%. Additionally, the Company is responsible for reimbursing the Landlord for the Company’s share of the Premises’ property taxes and certain other operating expenses. The Lease also provides for a tenant improvement allowance from the Landlord in an amount equal to $200 per square foot of the Premises, or approximately $25.1 million, towards the design and construction of certain tenant improvements made to the Premises, subject to the terms set forth in the Lease. The Company will contribute the remainder of the tenant improvement costs.
A security deposit in the approximate amount of $6.0 million in the form of a Standby Letter of Credit (the “Letter of Credit”) was delivered by the Company to the Landlord at the time of the Lease’s execution. Such Letter of Credit shall be reduced to approximately $4.2 million and $1.8 million at the conclusion of the third and sixth Lease years, respectively, provided certain conditions set forth in the Lease are satisfied.
There is no material relationship between the Company, or any of its affiliates, and Landlord, or any of its affiliates, other than the contractual relationship under the Lease.
The foregoing description of the Lease does not purport to be complete and is qualified in its entirety by reference to the full text of the Lease, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The disclosures set forth above under Item 1.01 are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| Exhibit No. | Description | |
| 104 * | Cover Page Interactive Data File (embedded within the Inline XBRL) |
* Furnished herewith
EXHIBIT INDEX
| Exhibit No. | Description | |
| 104 * | Cover Page Interactive Data File (embedded within the Inline XBRL) |
* Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Vericel Corporation | ||
| Date: February 2, 2022 | By: | /s/ Sean C. Flynn |
| Name: Sean C. Flynn | ||
Title: Vice President, General Counsel and Secretary | ||