Item 1.01 Entry into a Material Definitive Agreement.
On April 21, 2020, Mateon Therapeutics, Inc. (the "Company"), entered into a Paycheck Protection Program Promissory Note (the "PPP Note") with respect to a loan in the amount of $250,000 (the "PPP Loan") from Silicon Valley Bank (the "Lender"). The PPP Loan was obtained pursuant to the Paycheck Protection Program (the "PPP") of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") administered by the U.S. Small Business Administration ("SBA"). The PPP Loan matures on April 21, 2022 and bears interest at a rate of 1.00% per annum. The PPP Loan is payable in 17 equal monthly payments commencing November 21, 2020. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties.
All or a portion of the PPP Loan may be forgiven by the SBA and the Lender upon application by the Company within 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements.
Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, and covered utilities during the eight week period commencing on the date of loan approval.
For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually.
Not more than 25% of the forgiveness amount may be for non-payroll costs.
Forgiveness is reduced if full- time headcount declines, or if salaries and wages of employees with salaries of $100,000 or less annually are reduced by more than 25%.
After approval of the forgiveness amount and 6 month deferral period, the Lender will provide the Company with written notification of re-amortization of the PPP Loan and the remaining balance.
The foregoing description of the PPP Loan is qualified in its entirety by reference to the PPP Note filed as Exhibit 10.1 to this report and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure under Item 1.01 above is incorporated by reference in this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
See Exhibit Index.
Exhibit Index
Exhibit No. Description
EX-10.1
Paycheck Protection Program Promissory Note dated April 21, 2020 between Mateon Therapeutics, Inc. and Silicon Valley Bank.
SIGNATURES
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.
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