Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
O?-Balance Sheet Arrangement of a Registrant.
Pursuant to the Paycheck Protection Program (the "PPP") guidelines originally
established by the U.S. federal government as part of the Coronavirus Aid,
Relief and Economic Security Act, or the CARES Act, BioLife Solutions, Inc. (the
"Company") determined that it met the eligibility requirements and determined to
apply for relief to support its ability to maintain its employees' compensation
and avoid having to layoff or furlough any of its employees. As such, on April
20, 2020, the Company received $2,175,320 in support (the "PPP Loan") from the
PPP. The PPP Loan is unsecured and is evidenced by a note in favor of Silicon
Valley Bank (the "Lender") as the lender (the "Note"), and is governed by a Loan
Agreement with the Lender (the "Loan Agreement").
Because the U.S. government subsequently changed its position and guidelines
related to the PPP and publicly traded companies, the Company intends to repay
the loan on or before May 7, 2020. Prior to receiving the PPP Loan, the Company
had determined to reduce the compensation of its officers and directors by
twenty-five percent (25%), reduce the compensation of other staff members and
implement other cost reductions. At this time, the Company has no intent to
layoff or furlough any of its employees.
The interest rate on the Note is 1.0% per annum. Payments of principal and
interest are deferred for 180 days from the date of the Note (the deferral
period). The Paycheck Protection Program provides a mechanism for forgiveness of
up to the full amount borrowed as long as the Company uses the loan proceeds
during the eight-week period after the loan origination for eligible purposes,
including U.S. payroll costs, certain benefits costs, rent and utilities costs,
and maintains its employment and compensation levels, subject to certain other
requirements and limitations. The amount of loan forgiveness is subject to
reduction, among other reasons, if the Company terminates employees or reduces
salaries or wages during the eight-week period. Any unforgiven portion of the
PPP Loan is payable over a two-year term, with payments deferred during the
deferral period. The Company is permitted to prepay the Note at any time without
payment of any premium. The Note contains customary events of default,
including, among others, those relating to failure to make a payment,
bankruptcy, material defaults on other indebtedness, breaches of
representations, and material adverse changes.
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