Subsequent Events

12 Months Ended

Dec. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Third Amendment to Loan Agreement

On January 2, 2024, the Company and Rockwell Transportation, Inc. entered into the Third Amendment to and Restatement of the Loan and Security Agreement (the "A&R Loan Agreement") with Innovatus, dated January 1, 2024 (the "A&R Effective Date"). The A&R Loan Agreement provides for the continuation of term loans initially borrowed under the Loan Agreement amounting to $8.0 million as of the A&R Effective Date. The Company will make interest-only payments on the Term Loans for 30 months, or up to 36 months if certain conditions are met. The Term Loans will mature on the fifth anniversary of the A&R Effective Date, unless earlier repaid. The Term Loans will bear interest at the greater of (i) Prime Rate (as defined in the A&R Loan Agreement) and (ii) 7.50%, plus 3.50%. At the Company's option, 2.00% of the interest due on any applicable interest payment date during the interest-only period may be paid in-kind by adding such amount to the then outstanding principal balance of the Term Loans.

The Term Loans may be voluntarily prepaid in full (but not partially) at any time, upon at least seven business days’ prior notice. In connection with any voluntary prepayment or satisfaction of the Term Loans prior to the maturity date

(including any acceleration), the Company will pay all accrued and unpaid interest and all other amounts due in connection with the Term Loans, together with (x) a prepayment fee (the “Prepayment Fee”) equal to: (i) 6.0% of the principal amount of the Term Loans prepaid if the payment is made before the first anniversary of the A&R Effective Date; (ii) 2.0% of the principal amount of the Term Loans prepaid if the payment is made after the first anniversary of the A&R Effective Date but on or before the second anniversary of the A&R Effective Date; (iii) 1.0% of the principal amount of the Term Loans prepaid if the payment is made after the second anniversary of the A&R Effective Date but on or before the third anniversary of the A&R Effective Date; or (iv) 0% of the principal amount of the Term Loans prepaid if the payment is made after the third anniversary of the A&R Effective Date through maturity, and (y) an additional fee equal to 4.375% of the funded amount of the Term Loans Final Fee. The Term Loans will be mandatorily prepaid upon a change in control of the Company, or upon any early termination/acceleration of the Term Loans. In the event of a mandatory prepayment of the Term Loans, the Company shall be required to pay the Prepayment Fee (if applicable), as well as the Final Fee. The Final Fee shall be due and payable at maturity if it has not previously been paid in full in connection with a prepayment of the Term Loans.

The A&R Loan Agreement is secured by all assets of the Company and Rockwell Transportation, Inc. Proceeds were used for working capital purposes. The A&R Loan Agreement contains customary representations and warranties and affirmative and negative covenants, subject to exceptions as described in the A&R Loan Agreement. The A&R Loan Agreement includes a financial covenant that requires actual consolidated revenue from the sale and supply of hemodialysis products for the trailing six-month period (ended on the date when tested), to be not less than 85.0% of the projections for the same period and, beginning with the quarter ending September 30, 2024, actual consolidated revenue from the sale and supply of hemodialysis products for the trailing six-month period (ended on the date when tested), to be not less than 80.0% of the projections for the same period. The A&R Loan Agreement also includes a financial covenant that requires that the Company to maintain minimum liquidity of the greater of (x) the Company’s three-month cash burn or (y) the sum of $1.5 million and the aggregate amount of finance lease payments required to be made during the succeeding 12 months (or during a continuing event of default, the aggregate amount of finance lease payments required to be made during the entire term of such capital leases).

In connection with the execution of the A&R Loan Agreement, on January 2, 2024, the Company issued to Innovatus a warrant to purchase 191,096 shares of the Company’s common stock with an exercise price of $1.83 per share. The warrant may be exercised on a cashless basis, and is immediately exercisable through the January 2, 2029. The number of shares of common stock for which the warrant is exercisable and the exercise price are subject to certain proportional adjustments as set forth in the warrant.