| Item 1.01 |
Entry into a Material Definitive Agreement. |
Second Amendment to Loan Agreement
On November 27, 2023, Better Therapeutics, Inc. (the “Company”) entered into a Second Amendment to Loan Agreement (the “Second Amendment”) with Hercules Capital, Inc. (the “Administrative Agent”) and the lenders party thereto (the “Lenders”), amending that certain Loan and Security Agreement (the “Loan Agreement”), dated as of August 18, 2021, as amended by the First Amendment to Loan Agreement, by and among the Company, the Administrative Agent and the Lenders.
The Second Amendment provides the company the right to prepay the loans without prepayment penalties during the period from November 1, 2023 until March 31, 2024 with the cash proceeds of new financings (including equity, business development transactions, or permitted convertible debt) (collectively, “New Proceeds”). In addition, any prepayment made during the period from November 1, 2023 until March 31, 2024 with New Proceeds shall decrease the company’s minimum cash covenant dollar for dollar.
If the Company raises $500,000 in New Proceeds and does not apply those funds to prepayment, the Company can instead receive a one month pause on amortization payments (which may be repeated).
If the Company raises $5 million in New Proceeds (not including amounts applied to receive pauses on amortization payments), the Company is entitled to a three month pause on amortization payments and the Company may convert $1 million of outstanding loans under the Loan Agreement to equity. Each of the rights set forth herein are subject to additional conditions and limitations set forth in the Second Amendment.
On November 28, 2023, the Company announced that it is implementing various cost-saving measures, including company-wide salary reductions for the first quarter of 2024 to strengthen its financial position and maintain investments to support the commercial launch of AspyreRx, its lead product.