Windtree Therapeutics, Inc. entered into a Loan Agreement with LPH Investments Ltd., a wholly-owned subsidiary of Lee’s Pharmaceutical Holdings Limited. Under the Loan Agreement, LPH agreed to lend the company $1.5 million to support the company’s AEROSURF® development activities and sustain its operations while the parties seek to identify and advance one or more potential strategic initiatives ("Funding Event," as further defined in the Loan Agreement). The Loan, which was funded in a single installment by wire transfer on January 12, 2018, will accrue interest at a rate of 6% per annum and matures upon the earlier of the closing date of the Funding Event or December 31, 2018. The parties expect that, upon the closing of the Funding Event, the outstanding principal balance of the Loan will be applied in full satisfaction of a like amount of cash consideration payable by LPH for its participation in such Funding Event, and the Loan will be discharged in full thereby. At this time, the Company does not have an alternative source of funding available to repay the loan. Accordingly, if it is unable to complete the planned Funding Event for any reason, it likely will be forced to curtail some or all of its activities, including the AEROSURF development program and, ultimately, may be compelled to cease operations.