Cyclo Therapeutics, Inc. (NASDAQ:CYTH), a biopharmaceutical company, announced today that it has entered into a Seventh Amended and Restated Note Purchase Agreement with Rafael Holdings, Inc., issuing a convertible promissory note worth $3 million. The note, due on February 15, 2025, carries an interest rate of 5% per annum, payable upon maturity.
The newly issued note is part of a series of financing agreements between Cyclo Therapeutics and Rafael Holdings, dating back to an initial convertible promissory note issued on June 11, 2024. The series of agreements have provided Cyclo Therapeutics with a steady stream of capital, with the latest note amendable to prior agreements ranging from June to December 2024.
Under the terms of the note, Rafael Holdings has the option to convert the principal amount into shares of Cyclo Therapeutics' common stock prior to repayment. The conversion could occur automatically in the event of a Qualified Financing, at Rafael's discretion upon a Sale Transaction (JO:TCPJ), or if a Merger Agreement dated August 21, 2024, and amended on December 18, 2024, is executed. This Merger Agreement outlines a potential merger between Cyclo Therapeutics and a wholly-owned subsidiary of Rafael Holdings.
The note may be prepaid in full at any time by Cyclo Therapeutics. However, if an Event of Default occurs, including failure to pay the principal or interest when due, the obligations may be accelerated.
Cyclo Therapeutics intends to use the proceeds from the note for working capital and general corporate purposes. This financing strategy aligns with the company's ongoing efforts to support its operations and development programs.
Rafael Holdings currently holds approximately 39.5% of Cyclo Therapeutics' common stock, making it a significant shareholder with substantial interest in the company's success.
The news above is based on an SEC filing.
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