Item 1.01 Entry into a Material Definitive Agreement.
On December 5, 2019, we entered into a Note Purchase Agreement (the "Purchase
Agreement") with Atlas Sciences, LLC (the "Lender"), pursuant to which we issued
a Secured Promissory Note (the "Note") to the Lender. The Note has an original
principal amount of $2,175,625, bears interest at a rate of 10% per annum and
will mature in 24 months, unless earlier paid in accordance with its terms. If
we were to prepay all or any portion of the amount owed with in the first 12
months, the outstanding balance would be reduced by an amount equal to the
amount we prepay divided by 80%. By way of example, if we were to prepay
$100,000, we will receive a $125,000 reduction of the outstanding balance. We
received proceeds of $1,650,000 after an original issue discount and payment of
Lender's legal fees. Pursuant to a Security Agreement between us and the Lender
(the "Security Agreement"), repayment of the Note is secured by substantially
all of our assets other than its intellectual property.
We utilized $1,610,013 of the net proceeds from the Note to pay off in full our
obligation to Iliad Research and Trading, L.P. pursuant to the Secured
Convertible Promissory Note dated September 28, 2018 issued by us in favor of
Iliad.
We have filed herewith as Exhibits 10.1, 10.2 and 10.3, the Purchase Agreement,
Note and Security Agreement, which are incorporated herein by reference, and the
foregoing descriptions of the Purchase Agreement, Note and Security Agreement
are qualified in their entirety by reference thereto.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above in Item 1.01 of this Current Report on Form 8-K
is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No.
10.1 December 5, 2019 Note Purchase Agreement between the Company and Atlas
Sciences, LLC.
10.2 December 5, 2019 Secured Promissory Note from the Company to Atlas
Sciences, LLC.
10.3 December 5, 2019 Security Agreement between the Company and Atlas
Sciences, LLC.
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