NEMAURA MEDICAL INC. (OTCMKTS:NMRD) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
-
0
NEMAURA MEDICAL INC. (OTCMKTS:NMRD) Files An 8-K Entry into a Material Definitive Agreement

NEMAURA MEDICAL INC. (OTCMKTS:NMRD) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

Note Purchase Agreement

On April 15, 2020, Nemaura Medical Inc. (the “Company”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”) by and among the Company, Dermal Diagnostics Limited (“Dermal”), Trial Clinic Limited (“Trial” and together with Dermal, the “Borrower”) and Chicago Venture Partners, L.P. (the “Investor”).

to the terms of the Note Purchase Agreement, the Borrower agreed to issue and sell to the Investor and the Investor agreed to purchase from the Borrower a secured promissory note (the “Secured Note”) in the original principal amount of $6,015,000. In consideration thereof, on April 15, 2020 (the closing date), (i) the Investor (a) paid $1,000,000 in cash, (b) issued to the Borrower (1) Investor Note #1 in the principal amount of $2,000,000 (“Investor Note #1”), and (2) Investor Note #2 in the principal amount of $2,000,000 (“Investor Note #2” and together with Investor Note #1, the “Investor Notes”), and (ii) the Borrower delivered the Secured Note on behalf of the Borrower, to the Investor, against delivery of the Purchase Price. For these purposes, the “Purchase Price” means the Investor’s initial cash purchase price, together with the sum of the initial principal amounts of the Investor Notes.

The Secured Note is secured by the Collateral (as hereinafter defined). The Secured Note carries an original issue discount (“OID”) of $1,000,000. In addition, the Borrower agreed to pay $15,000 to the Investor to cover the Investor’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Secured Note (the “Transaction Expense Amount”), all of which amount is included in the initial principal balance of the Secured Note. The Purchase Price for the Secured Note is $5,000,000, computed as follows: $6,015,000 original principal balance, less the OID, less the Transaction Expense Amount.

The Note Purchase Agreement contains customary representations, warranties and covenants.

The foregoing description of the Note Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Purchase Agreement, a copy of which is filed hereto as Exhibit 10.1 and is incorporated by reference herein.

Secured Note

On April 15, 2020, the Borrower issued, to the Note Purchase Agreement, the Secured Promissory Note (the “Secured Note”) in the principal amount of $6,015,000 in favor of the Borrower. to the terms of the Secured Note, the Company, Dermal and Trial jointly and severally promise to pay to the Investor $6,015,000 and any fees, charges and late fees accrued under the Secured Note on the date that is 24 months after the date that the Initial Cash Purchase Price (as defined in the Note Purchase Agreement) is delivered by the Investor to the Borrower (the “Purchase Price Date”). The Secured Note carries an OID of $1,000,000. In addition, the Borrower agreed to pay the $15,000 Transaction Expense Amount to the Investor, all of which amount is fully earned and included in the initial principal balance of the Secured Note. The purchase price for the Secured Note is $5,000,000 (the “Purchase Price”), computed as follows: $6,015,000 original principal balance, less the OID, less the Transaction Expense Amount.

The Secured Note is secured by the Security Agreement (as hereinafter defined).

The Borrower has the right to prepay all or any portion of the Outstanding Balance (as such term is defined in the Secured Note). If the Borrower exercises its right to prepay the Secured Note, the Borrower must make payment to the Investor of an amount in cash equal to 110% multiplied by the portion of the Outstanding Balance the Borrower elects to repay.

to the terms of Secured Note, beginning on May 1, 2020 and continuing on the first day of each month thereafter until the Secured Note has been paid in full, a monitoring fee equal to 0.833% of the then-current Outstanding Balance will automatically be added to the Outstanding Balance.

Beginning on the date that is six months after the Purchase Price Date, the Investor has the right, exercisable at any time in its sole and absolute discretion, to redeem any amount of the Secured Note up to the Maximum Monthly Redemption Amount (as hereinafter defined) per calendar month by providing writing notice to the Borrower. The “Maximum Monthly Redemption Amount” means $100,000 until March 31, 2021 and $500,000 thereafter.

The following events are events of default under the Secured Note (each, a “Secured Note Event of Default”):

If any of the events specified below shall occur (each, an “Investor Note #1 Default”), the Borrower may declare the unpaid principal balance under Investor Note #1, together with all accrued and unpaid monitoring fees thereon, fees incurred or other amounts owing hereunder immediately due and payable, by notice in writing to the Investor. If any default is curable, then the default may be cured (and no Investor Note #1 Default will have occurred) if the Investor, after receiving written notice from the Borrower demanding cure of such default, either (i) cures the default within 15 days of receipt of such notice, or (ii) if the cure requires more than 15 days, immediately initiates steps that the Borrower deems in the Borrower’s reasonable discretion to be sufficient to cure the default and thereafter diligently continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. Each of the following events will constitute an Investor Note #1 Default:

Security Agreement

On April 15, 2020, the Company entered into the Security Agreement by the Company, Dermal and Trial, in favor of the Investor (the “Security Agreement”). to the terms of the Security Agreement, the Borrower entered into the Security Agreement and granted the Investor a first-priority security interest in all right, title, interest, claims and demands of the Borrower in and to all of the Borrower’s patents and all other proprietary rights, and all rights corresponding to the Borrower’s patents throughout the world, now owned and existing, and all replacements, proceeds, products and accessions thereof (the “Collateral”) in order to induce the Investor to extend the credit evidenced by the Note.

The Security Agreement contains customary representations, warranties and covenants of the Borrower.

The foregoing description of the Security Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Security Agreement, a copy of which is filed hereto as Exhibit 10.5 and is incorporated by reference herein.

The disclosure set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

On April 21, 2020, the Company issued a press release announcing that it has secured a 24-month, $5 million non-convertible loan. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information included in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information set forth under this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.

(d) Exhibits.


Nemaura Medical Inc. Exhibit
EX-10.1 2 ex10x1.htm EXSHIBIT 10.1 Exhibit 10.1       NOTE PURCHASE AGREEMENT   THIS NOTE PURCHASE AGREEMENT (this “Agreement”),…
To view the full exhibit click here

About NEMAURA MEDICAL INC. (OTCMKTS:NMRD)

Nemaura Medical, Inc. is a holding company. The Company owns a diagnostic medical device company specializing in discovering, developing and commercializing specialty medical devices. The Company’s focus is on the development of a continuous glucose monitoring (CGM) device, which consists of a disposable patch containing a sensor, and a non-disposable miniature electronic watch with a re-chargeable power source. CGM through a non-invasive patch can enable early detection of subtle changes in blood glucose levels. The Company, through its operating subsidiaries, performs medical device research and manufacturing of a CGM, named sugarBEAT. The sugarBEAT device is a non-invasive, wireless device for use by persons with Type I and Type II diabetes, and may also be used to screen pre-diabetic patients. The sugarBEAT device extracts analytes, such as glucose, to the surface of the skin in a non-invasive manner where it is measured using sensors and interpreted using an algorithm.