Item 1.01 Entry into a Material Definitive Agreement.
On April 26, 2023, Aridis Pharmaceuticals, Inc. (the "Company") entered into a
Note Purchase and Loan Restructuring Agreement (the "Agreement") with
Streeterville Capital, LLC (the "Investor"). We had previously issued to the
Investor in February 2021, a secured promissory note in the original principal
amount of $5,250,000. Pursuant to the Agreement, the Investor agreed to invest
an additional investment amount of up to $2,500,000, $1,000,000 of which will
delivered to the Company at closing and the remaining $1,500,000 of which will
be placed into escrow under a secured line of credit facility with the total
original principal amount of the secured promissory note being up to
$9,286,770.80 (the "Secured Note"). Closing occurred on April 26, 2023 (the
"Issuance Date"). The Note carries an original issue discount of $606,564.45.
The Note bears interest at the rate of 8% per annum and matures on April 26,
2024. Beginning on October 26, 2023, on the same day of each month for the
following five (5) calendar months thereafter, the Company will be obligated to
reduce the Outstanding Balance of the Secured Note by sixteen and two-thirds
percent (16.6667%) of the Outstanding Balance of the Secured Note per month. The
Company can prepay all or any portion of the Outstanding Amount at a rate of
110% of the portion of the Outstanding Balance.
Of the $1,500,000 placed into escrow, $750,000.00 of the escrowed amount will be
released upon (a) satisfaction of all of the Draw Conditions as set forth in the
Secured Note; (b) all of Investor's security interests granted have been
perfected to Investor's reasonable satisfaction; and (c) the Company has filed a
preliminary Form S-1 with the SEC (the "First Draw Conditions") and the balance
of the escrowed amount will be released upon (a) satisfaction of all of the Draw
Conditions; (b) all of the First Draw Conditions shall have been satisfied; and
(c) either (1) the Company has raised $750,000.00 in new funding through the
sale of shares of its common stock through its Form S-1, or (2) ninety-one (91)
days have passed since the Effective Date.
Pursuant to the Note Purchase Agreement, we are subject to certain covenants,
including the obligations to: (i) timely file all reports required to be filed
under Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and not terminate its status as an issuer required to file
reports under the Exchange Act; (ii) maintain listing of our common stock on a
securities exchange; and (iii) avoid trading in our common stock from being
suspended, halted, chilled, frozen or otherwise ceased.
In addition, pursuant to the Security Agreement dated April 26, 2023 between the
Company and the Investor, the Note is secured by all of the Company's assets.
The foregoing descriptions of the Agreement, the Security Agreement and the Note
do not purport to be complete and are qualified in their entirety by reference
to the full text of the Agreement, the Security Agreement and the Note, forms of
which are attached as Exhibit 10.1, 10.2 and 4.1, respectively, to this Current
Report on Form 8-K, and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Form 8-K is hereby incorporated by
reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
4.1 Form of Secured Promissory Note
10.1 Note Purchase Agreement dated as of April 26, 2023
10.2 Security Agreement dated as of April 26, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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