| Item 1.01. | Entry into a Material Definitive Agreement. |
Amendment to Secured Promissory Note
On May 12, 2020, Myomo, Inc. (the “Company”), and Iliad Research and Trading, L.P. (the “Lender”) entered into an Amendment (the “Amendment”) to the Company’s existing Secured Promissory Note, issued on October 22, 2020 (as amended, the “Note”) with the Lender. The original principal amount of the Note is $3.3 million (the “Borrowings”). As of May 12, 2020, an aggregate of $1,745,701 of the Borrowings remained outstanding.
Among other things, the Amendment provided the ability for the Company, subject to the terms and conditions contained therein, to satisfy certain repayment obligations through the issuance of Common Stock rather than in cash. Pursuant to the terms of the Note, the Lender will have the right to redeem up to $400,000 of the Borrowings per calendar month for the first three redemptions after the inception date, and $300,000 per calendar month thereafter by submitting a notice to the Company (a “Redemption Notice”). Upon receipt of a Redemption Notice, the Company may, at its election, either (i) pay the amount set forth in the Redemption Notice in cash within seven trading days of Company’s receipt of such Redemption Notice, or (ii) convert the amount set forth in the Redemption Notice into shares of Common Stock (the “Conversion Shares”) within three trading days of Company’s receipt of such Redemption Notice. The Lenders’ per share conversion price will be 91% of the lowest daily volume weighted average price per share of the Common Stock on the NYSE American for the ten trading days immediately preceding such conversion. The Company may not make redemptions in shares of Common Stock and must satisfy such redemption in cash within three trading days of receipt of the redemption notice if there is an Equity Conditions Failure (as defined in the Amendment). The Company may defer up to three redemptions for up to thirty days. The outstanding balance under the Note will be automatically increased by (a) the greater of $35,000.00 and one percent (1%) of the outstanding balance as of the date Company exercises its first deferral right, (b) the greater of $35,000.00 and one and a quarter percent (1.25%) of the outstanding balance as of the date the Company exercises its second deferral right and (c) the greater of $35,000.00 and one and a half percent (1.5%) of the outstanding balance as of the date the Company exercises its third deferral right. In addition, the Company may not issue shares of Common Stock to Lender if such issuance would cause Lender to beneficially own in excess of 9.99% of the Company’s Common Stock outstanding on the date of such issuance. The Company is also prohibited from issuing shares of Common Stock to the extent that such issuance would exceed the amounts described in Section 713 of the NYSE American LLC Company that would require stockholder approval of the Company. While the Company is under no obligation to seek such stockholder approval, if the Company does obtain such approval, this limit will be removed.
The Company has also agreed to pay to the Lender a fee of $105,000 in consideration of the Lender’s agreement to make the Note convertible, which fee has been added onto the outstanding balance of the Note.
The foregoing description of the material terms of the Amendment does not purport to be complete and is subject to, and is qualified in their entirety by, reference to the Amendment, a copy of which is attached to this Current Report on Form8-K as Exhibit 4.1.
| Item 2.02. | Results of Operations and Financial Condition. |
On May 14, 2020, the Company announced its financial results for the quarter ended March 31, 2020. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form8-K.
