UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported)
|
April
21, 2020
|
ENDRA Life Sciences Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
001-37969
|
|
26-0579295
|
(State
or other jurisdiction of incorporation
|
|
(Commission
File Number)
|
|
(IRS
Employer Identification No.)
|
3600
Green Court, Suite 350 Ann Arbor, MI
|
|
48105
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
|
|
|
Registrant's
telephone number, including area code
|
|
(734)
335-0468
|
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐ Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)
☐ Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common
stock, par value $0.0001 per share
|
NDRA
|
The
Nasdaq Stock Market LLC
|
Warrants,
each to purchase one share of Common Stock
|
NDRAW
|
The
Nasdaq Stock Market LLC
|
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging
growth company ☑
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive
Agreement.
ENDRA
Life Sciences Inc. (the “Company”) previously submitted
an application to First Republic Bank (the
“Lender”) under the Small Business Administration (the
“SBA”) Paycheck Protection Program (the
“PPP”) promulgated under the Coronavirus Aid, Relief
and Economic Security Act of 2020 (the “CARES Act”).
The application was subsequently approved and, on April 21, 2020,
the Company issued a U.S. Small Business Administration Paycheck
Protection Program Note (the “Note”) to the Lender for
a loan in the principal amount of $308,600.00 (the
“Loan”). The Company received the full amount of the
Loan on April 22, 2020.
The
advance under the Loan bears interest at a rate per annum of 1.00%.
The term of the Loan is two years, ending April 22, 2022 (the
“Maturity Date”). No payments are due on the Loan until
seven months from the date of first disbursement of the Loan (the
“Deferment Period”), but interest will accrue during
the Deferment Period. Following the Deferment Period, the Company
must pay monthly principal and interest payments on the outstanding
principal balance of the Loan amortized over the term of the Loan
(the “Loan Payments”), unless forgiven in whole or in
part in accordance with the PPP regulations.
The
Company may apply to the Lender for the Loan be forgiven partially
or fully if the funding received is used during the 8-week period
following disbursement for payroll costs, covered rent, and covered
utilities, provided that at least 75% of the forgiven amount has
been used for payroll costs. Forgiveness is based on the
Company’s maintaining, or quickly rehiring employees and
maintaining applicable salary levels. Forgiveness will be reduced
if full-time headcount declines, or if salaries and wages decrease.
No assurance is provided that the Company will obtain forgiveness
of the Loan in full or in part.
The
Company may prepay the principal of the Loan at any time without
incurring any prepayment charges. The Company may prepay 20% or
less of the unpaid principal balance at any time without notice. If
the Company prepays more than 20% and the Loan has been sold on the
secondary market, the Company must provide the Lender with written
notice, pay all accrued interest and comply with the other
requirements described in the Note for such repayment.
The
Company did not provide any collateral or personal guarantees for
the Loan, nor did the Company pay any facility charge to the
government or to the Lender.
The
Note also provides for customary events of default, including,
among others, events of default relating to failure to make payment
or comply with the covenants contained in the Note and related loan
documents, defaults on any other loan with the Lender, defaults on
any loan or agreement with another creditor (if the Lender believes
the default may materially affect the Company’s ability pay
the Note), failure to pay any taxes when due, bankruptcy, breaches
of representations, judgment, reorganization, merger, consolidation
or other changes in ownership or business structure without the
Lender’s prior written consent, and material adverse changes
in financial condition or business operation. Upon an event of
default the Lender may require immediate payment of all amounts
owing under the Note, collect all amounts owing from the Company,
or file suit and obtain judgment.
The
foregoing summary of the Note does not purport to be complete and
is qualified in its entirety by reference to the Note, which will
be filed as an exhibit to the Company’s next Quarterly Report
on Form 10-Q and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The
information set forth in Item 1.01, “Entry into a Material
Definitive Agreement” of this Current Report on Form 8-K is
incorporated herein by this reference.
Item 3.01 Notice
of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard, Transfer of Listing.
On
April 24, 2020, the Company received a notification letter from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
(“Nasdaq”) notifying the Company that, because the
closing bid price for the Company’s common stock
listed on Nasdaq was below $1.00 for 30 consecutive trading days,
the Company no longer meets the minimum bid price requirement
for continued listing on The Nasdaq Capital Market under Nasdaq
Marketplace Rule 5550(a)(2), requiring a minimum bid
price of $1.00 per share (the “Minimum Bid
Price Requirement”).
The
notification has no immediate effect on the listing of the
Company’s common stock. In accordance with Nasdaq Marketplace
Rule 5810(c)(3)(A) and the rule change filed by Nasdaq with the
Securities and Exchange Commission on April 16, 2020, the Company
has a period of 180 calendar days from July 1, 2020, or until
December 28, 2020, to regain compliance with the Minimum Bid
Price Requirement. If at any time before December 28, 2020
the bid price of the Company’s common stock closes
at or above $1.00 per share for a minimum of 10 consecutive
business days, Nasdaq will provide written notification that the
Company has achieved compliance with the Minimum Bid
Price Requirement.
The
notification letter also disclosed that in the event the Company
does not regain compliance with the Minimum Bid
Price Requirement by December 28, 2020, the Company may be
eligible for additional time. To qualify for additional time, the
Company would be required to meet the continued listing requirement
for market value of publicly held shares and all other initial
listing standards for The Nasdaq Capital Market, with the exception
of the bid price requirement, and would need to provide
written notice of its intention to cure the deficiency during the
second compliance period, by effecting a reverse stock split, if
necessary. If the Company meets these requirements, Nasdaq will
inform the Company that it has been granted an additional 180
calendar days to regain compliance. However, if it appears to the
staff of Nasdaq (the “Staff”) that the Company will not
be able to cure the deficiency, or if the Company is otherwise not
eligible, the Staff would notify the Company that its securities
will be subject to delisting. In the event of such notification,
the Company may appeal the Staff’s determination to delist
its securities, but there can be no assurance the Staff would grant
the Company’s request for continued listing.
The
Company intends to continue actively monitoring the bid price for
its common stock between now and December 28, 2020 and will
consider available options to resolve the deficiency and regain
compliance with the Minimum Bid
Price Requirement.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
ENDRA Life Sciences Inc.
|
|
April
27, 2020
|
|
|
|
By:
|
/s/
Francois Michelon
|
|
Name:
|
Francois
Michelon
|
|
Title:
|
President
and Chief Executive Officer
|