ARDS Aridis Pharmaceuticals Inc

On April 26, 2023, Aridis Pharmaceuticals, Inc. (the “Company”) entered into a Note Purchase and Loan Restructuring Agreement (the “Agreement”) with Streeterville Capital, LLC (the “Investor”). We had previously issued to the Investor in February 2021, a secured promissory note in the original principal amount of $5,250,000. Pursuant to the Agreement, the Investor agreed to invest an additional investment amount of up to $2,500,000, $1,000,000 of which will delivered to the Company at closing and the remaining $1,500,000 of which will be placed into escrow under a secured line of credit facility with the total original principal amount of the secured promissory note being up to $9,286,770.80 (the “Secured Note”). Closing occurred on April 26, 2023 (the “Issuance Date”). The Note carries an original issue discount of $606,564.45. The Note bears interest at the rate of 8% per annum and matures on April 26, 2024. Beginning on October 26, 2023, on the same day of each month for the following five (5) calendar months thereafter, the Company will be obligated to reduce the Outstanding Balance of the Secured Note by sixteen and two-thirds percent (16.6667%) of the Outstanding Balance of the Secured Note per month. The Company can prepay all or any portion of the Outstanding Amount at a rate of 110% of the portion of the Outstanding Balance.

Of the $1,500,000 placed into escrow, $750,000.00 of the escrowed amount will be released upon (a) satisfaction of all of the Draw Conditions as set forth in the Secured Note; (b) all of Investor’s security interests granted have been perfected to Investor’s reasonable satisfaction; and (c) the Company has filed a preliminary Form S-1 with the SEC (the “First Draw Conditions”) and the balance of the escrowed amount will be released upon (a) satisfaction of all of the Draw Conditions; (b) all of the First Draw Conditions shall have been satisfied; and (c) either (1) the Company has raised $750,000.00 in new funding through the sale of shares of its common stock through its Form S-1, or (2) ninety-one (91) days have passed since the Effective Date.

Pursuant to the Note Purchase Agreement, we are subject to certain covenants, including the obligations to: (i) timely file all reports required to be filed under Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and not terminate its status as an issuer required to file reports under the Exchange Act; (ii) maintain listing of our common stock on a securities exchange; and (iii) avoid trading in our common stock from being suspended, halted, chilled, frozen or otherwise ceased.

In addition, pursuant to the Security Agreement dated April 26, 2023 between the Company and the Investor, the Note is secured by all of the Company’s assets.

The foregoing descriptions of the Agreement, the Security Agreement and the Note do not purport to be complete and are qualified in their entirety by reference to the full text of the Agreement, the Security Agreement and the Note, forms of which are attached as Exhibit 10.1, 10.2 and 4.1, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.