UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement
As previously disclosed, on November 13, 2023, VBI Vaccines Inc. (the “Company”) along with its subsidiary VBI Cda (collectively, the “Borrowers”) entered into a forbearance agreement (the “Forbearance Agreement”) with K2 HealthVentures LLC (“K2HV”) and any other lender from time-to-time party thereto (the “Lenders”), pursuant to which the Lenders agreed to forbear from exercising the Secured Parties’ (as defined in that certain Loan and Guaranty Agreement between the Borrowers and the Lenders, dated as of May 22, 2020 (as amended, the “Loan Agreement”)), rights with respect to the failure to meet the minimum Net Revenue (as defined in the Loan Agreement) covenant for the measurement period ended September 30, 2023, from November 13, 2023, through and including November 28, 2023 (the “Forbearance Period”), subject to compliance by the Borrowers with certain terms and conditions as set forth in the Forbearance Agreement. Additionally, as previously disclosed, on November 28, 2023, December 12, 2023, December 26, 2023, January 9, 2024, and January 23, 2024, effective as of the same dates, the Borrowers and the Lenders agreed to extend the Forbearance Period through and including December 12, 2023, December 26, 2023, January 9, 2024, January 23, 2024, and February 6, 2024, respectively, subject to compliance by the Borrowers with the same terms and conditions as set forth in the Forbearance Agreement.
Effective February 6, 2024, the Borrowers and the Lenders agreed to further extend the Forbearance Period through and including February 20, 2024, subject to compliance by the Borrowers with the same terms and conditions as set forth in the Forbearance Agreement.
There is no assurance that the Company will be able to meet the conditions set forth in the Forbearance Agreement, which will result in a termination of the Forbearance Period. In addition, the Forbearance Agreement is not a waiver by K2HV of the Company’s obligation to meet the covenants pursuant to the Loan Agreement. Accordingly, K2HV may declare an Event of Default after the end of the Forbearance Period, and there is no assurance that the Company would be able to enter into another forbearance agreement for any additional periods. Upon occurrence and during the continuance of an Event of Default, K2HV is entitled to declare all obligations under the Loan Agreement immediately due and payable and to stop advancing money or extending credit under the Loan Agreement, and the applicable rate of interest will be increased by 5.00% per annum.
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.
| VBI Vaccines Inc. | ||
| Date: February 6, 2024 | By: | /s/ Jeffrey R. Baxter |
| Jeffrey R. Baxter | ||
| President and Chief Executive Officer | ||