The NPA includes customary representations, warranties, and covenants from both the Company and the Investor. The Company has committed to timely make all necessary filings under the Securities Exchange Act of 1934 and to maintain its common stock listing on The Nasdaq Capital Market. Additionally, the Company is restricted from encumbering its assets and from making any restricted issuances without the Investor's prior consent.
The Note carries an interest rate of the prime rate plus 3%, with a minimum rate of 9.5%, and is scheduled to mature 15 months after the closing date. The Investor has the right to redeem up to $3,000,000 of the outstanding balance per calendar quarter starting six months after the closing. All cash payments, including prepayments, will incur a 7.5% exit fee.
In conjunction with the issuance of the Note, the Company and Avondale Capital have amended the Avondale Note to extend its maturity to December 31, 2026. This amendment is crucial as it provides the Company with additional time to manage its financial obligations while pursuing its operational goals.
The Company has expressed substantial doubt about its ability to continue as a going concern, emphasizing the need for additional funding to support its operations and product development efforts. The Company’s cash and cash equivalents as of December 31, 2025, were reported at $8.7 million, which, along with recent proceeds from stock sales, is not expected to be sufficient to fund operations for the next 12 months. The Company is actively seeking additional capital to ensure its sustainability and growth in the competitive biotechnology sector.
