Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On January 25, 2021, Solajet Financing Company LLC ("Solajet"), a wholly-owned
subsidiary of Omnia Wellness Inc. (the "Company"), received funding in the
original principal amount of $148,625 (the "PPP Loan") pursuant to the federal
Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief and
Economic Security Act, as amended from time to time (the "CARES Act"), which is
administered by the U.S. Small Business Administration (the "SBA"). The PPP Loan
was funded by JPMorgan Chase Bank, N.A. (the "Bank") pursuant to the terms of a
Note (the "Note"), dated as of January 25, 2021. The PPP Loan bears interest at
0.98% per annum and matures five years from the date of disbursement of funds
under the PPP Loan. Interest and principal payments under the PPP Loan will be
deferred for a period ending on the date on which the amount of any forgiveness
of the PPP Loan determined under the CARES Act is remitted to the Bank by the
SBA or forgiveness is denied. After the deferral period, if the PPP Loan is not
forgiven as described below, Solajet will be obligated to repay the total
outstanding balance remaining due under the PPP Loan, including principal and
interest, pursuant to the repayment terms established by the Bank and set forth
in the Note. Solajet is permitted to prepay or partially prepay the PPP Loan at
any time without payment of any premium.
Under the terms of the CARES Act, PPP loan recipients can apply for, and be
granted, forgiveness for all or a portion of loans granted under the PPP. Such
forgiveness will be determined, subject to limitations and ongoing rulemaking by
the SBA, based on the use of loan proceeds. The Company is determining to what
extent some or all of the PPP Loan will be forgiven under the CARES Act. The
Company can give no assurance that Solajet will obtain forgiveness of the PPP
Loan in whole or in part.
The PPP Loan contains certain covenants which, among other things, restrict
Solajet's use of the proceeds of the PPP Loan to retain workers and maintain
payroll or make mortgage interest payments, lease payments, and utility
payments. Solajet intends to use the PPP Loan for some or all of the purposes
permissible under the CARES Act.
The foregoing is a brief description of the Note and the material terms of the
Note and is qualified in its entirety by reference to the full text of the Note,
which is included as Exhibit 10.1 to this Current Report on Form 8-K and which
is incorporated herein by reference.
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