Item 1.01 Entry into a Material Definitive Agreement.
On September 21, 2022, Surface Oncology, Inc. (the "Company") entered into a
Second Amendment to Loan and Security Agreement (the "Amendment") with K2
HealthVentures LLC (together with any other lender from time to time party
thereto, the "Lenders") and K2 HealthVentures LLC, as administrative agent for
the Lenders (the "Administrative Agent"), which amended the Company's existing
Loan and Security Agreement, dated November 19, 2019, by and among the Company,
the Lenders, the Administrative Agent and Ankura Trust Company, LLC, as
collateral agent for Lenders (the "Collateral Agent"), as amended by the First
Amendment to Loan and Security Agreement, dated October 1, 2021, by and among
the Company, the Lenders and the Administrative Agent and Collateral Agent
(together, the "Original Loan Agreement"). Under the Amendment, the Amortization
Date (as defined in the Amendment) was extended from April 1, 2023 to
February 1, 2024, and the Conversion Price (as defined in the Amendment) was
decreased from $7.81 to $1.83.
The loan facility continues to carry a 48-month term with interest only payments
extended by the Amendment from April 1, 2023 to February 1, 2024, for a total of
29 months.
In addition, the Lenders may elect, at any time prior to the payment in full of
the loans under the Amendment, to convert any portion of the principal amount of
the loan then outstanding into shares of common stock, par value $0.0001 per
share, of the Company, in an amount up to $4.5 million, at a conversion price of
(i) with respect to the first $500,000 converted, $1.56 per share and (ii) with
respect to any additional amounts converted in excess of $500,000, $1.83 per
share (such shares, the "Conversion Shares"), subject to specified limitations
if necessary to comply with the rules of the Nasdaq Global Market.
The Original Loan Agreement, as amended by the Amendment, will continue to
provide the Lenders with certain registration rights with respect to the
Conversion Shares.
The above description of the Amendment does not purport to be complete and is
qualified in its entirety by reference to the full text of the Amendment, a copy
of which is filed as Exhibit 10.1 hereto and is incorporated by reference
herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 is hereby incorporated by reference in
this Item 2.03.
Item 9.01 Exhibits
Exhibit
Number Description
10.1 Second Amendment to Loan and Security Agreement, dated September 21,
2022, by and between Surface Oncology, Inc. and K2 HealthVentures LLC
104 Cover Page Interactive Data (embedded within the Inline XBRL document)
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