TEARLAB CORPORATION (NASDAQ:TEAR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into A Material Definitive Agreement.
PPP Loan
On May 6, 2020, TearLab Corp. (the “Company”) entered into a loan agreement to receive funding under a United States Small Business Administration (“SBA”) loan (the “PPP Loan”) from a commercial bank under the SBA’s Payroll Protection Program (“PPP”). The Company received the funds on May 7, 2020. The principal loan amount is $801,030.
The PPP Loan has a two-year term, maturing on May 6, 2022. The interest rate on the PPP Loan is 1.0% per annum. Principal and interest are payable in monthly installments, beginning six months after the date of disbursement, until maturity with respect to any portion of the PPP Loan which is not forgiven as described below. The Company did not provide any collateral or guarantees for the PPP Loan, nor did the Company pay any facility charge to obtain the PPP Loan. The PPP Loan provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. The Company is permitted to prepay or partially prepay the PPP Loan at any time with no prepayment penalties.
The PPP Loan may be partially or fully forgiven if the Company complies with the provisions of the CARES Act, including the use of PPP Loan proceeds for payroll costs, rent, utilities and other expenses. The PPP Loan is forgivable in its entirety if the Company supplies verifying documentation that it has used 75% of the PPP Loan proceeds for covered payroll costs and not more than 25% of the PPP Loan proceeds for SBA approved non-payroll costs incurred before February 15, 2020, over the eight week period from the date of disbursement of the loan.
The foregoing description of the PPP Loan is qualified in its entirety by reference to the provisions of the PPP Loan agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
CRG Consent
On May 10, 2020, effective May 7, 2020, the Company entered into a Consent (the “Consent”) to its Term Loan Agreement, dated as of March 4, 2015, as amended by the Omnibus Amendment Agreement, dated as of April 2, 2015, Amendment 2, dated as of August 6, 2015, Amendment 3, dated as of December 31, 2015, Amendment 4, dated as of April 7, 2016, Amendment 5, dated as of October 12, 2017, Amendment 6, dated as of April 4, 2018, Amendment 7, dated as of November 12, 2018, and Amendment 8, dated as of October 4, 2019, by and among the Company, certain of its subsidiaries from time to time party thereto as guarantors and certain affiliate funds of CRG as lenders. The Consent provides for the lenders’ consent to the Company’s receipt of the PPP Loan.
The foregoing description of the Consent is qualified in its entirety by reference to the provisions of the Consent, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information about the PPP Loan and the Consent disclosed in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
| 10.1 | Paycheck Protection Program Promissory Note and Agreement dated as of May 6, 2020 |
| 10.2 | Consent |
TearLab Corp Exhibit
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About TEARLAB CORPORATION (NASDAQ:TEAR)
TearLab Corporation is an in-vitro diagnostic company. The Company has commercialized a tear testing platform, the TearLab Osmolarity System, which enables eye care practitioners to test for sensitive and specific biomarkers using nanoliters of tear film at the point-of-care. The Company, through its subsidiary TearLab Research, Inc., develops technologies to enable eye care practitioners to test a range of biomarkers (chemistries, metabolites, genes and proteins) at the point-of-care. Its product, the TearLab Osmolarity System, enables the measurement of tear osmolarity in the doctor’s office. The TearLab Osmolarity System consists of approximately three components: the TearLab disposable, the TearLab Pen, and the TearLab Reader. The TearLab disposable is a single-use microfluidic microchip. The TearLab Pen is a hand-held device that interfaces with the TearLab disposable. The TearLab Reader is a small desktop unit that allows for the docking of the TearLab Pen.