On February 16, 2024, AIM ImmunoTech Inc. (the "Company", "we", "us" or "our") reported to have entered into a Note Purchase Agreement (the "Note Purchase Agreement") with Streeterville Capital, LLC (the "Investor") and consummated the sale to such Investor of an unsecured Promissory Note (the "Note") with an original principal amount of $3,301,250 in a private placement (the "Private Placement") that closed on February 16, 2024 (Filing, 8-K, AIM ImmunoTech, FEB 16, 2024, View Source [SID1234640251]).
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The Note carries an original issuance discount of $781,250 and the Company agreed to pay $20,000 to the Investor to cover the Investor’s legal and administrative transaction costs, each of which were included in the original principal amount and deducted from the proceeds of the Note received by the Company which resulted in a purchase price received by the Company of $2,500,000.
The Note bears interest at ten percent (10%) per annum compounded daily. The maturity date of the Note is 24 months from the date of its issuance (the "Maturity Date").
We may prepay any or all of the outstanding balance under the Note prior to the Maturity Date, provided that if such prepayment covers less than the entire principal, fees and interest of the Note, the Company will remain subject to the remaining obligations under the Note.
The Note provides for customary events of default, including, among other things, the event of non-payment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect when made, failure to perform or observe covenants within a specified period of time, a cross-default to certain other indebtedness of the Company, the bankruptcy or insolvency of the Company or of all or a substantial part of its property, monetary judgment defaults of a specified amount and other defaults resulting in liability of a specified amount. Upon the occurrence of an Event of Default, as defined in Section 4 of the Note, interest would accrue on the outstanding balance beginning on the date the applicable Event of Default occurred at an interest rate equal to the lesser of twenty-two percent (22%) or the maximum rate permitted under applicable law.
Beginning on the date that is six months after the Purchase Price Date, Investor shall have the right, exercisable at any time in its sole and absolute discretion, to redeem any amount of the Note up to $250,000 (such amount, the "Monthly Redemption Amount") per calendar month by providing written notice to the Company (each, a "Redemption Notice"); provided, however, that if the Investor does not exercise any Monthly Redemption Amount in its corresponding month then such Monthly Redemption Amount shall be available for the Investor to redeem in any future month in addition to such future month’s Redemption Amount. Upon receipt of any Monthly Redemption Notice, the Company shall pay the applicable Monthly Redemption Amount in cash to the Investor within three business days of the Company’s receipt of such Monthly Redemption Notice.
The foregoing is only a summary of the material terms of the Note Purchase Agreement and the Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder. Furthermore, the foregoing is qualified in its entirety by reference to such documents, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.