Note 8 - Note Payable Under Paycheck Protection Program

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

( 8 ) Note payable under Paycheck Protection Program

Paycheck Protection Program

- On

May 1, 2020,

BioCardia Lifesciences, Inc. (the “Borrower”), a wholly owned subsidiary of BioCardia, Inc. (the “Company”), entered into a promissory note (the “Note”) with Silicon Valley Bank (the “Lender”) evidencing an unsecured loan in the aggregate principal amount of

$506,413

pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration. All the funds under the Note were disbursed to the Borrower on

May 1, 2020.

In accordance with the requirements of the CARES Act, the Borrower will use the proceeds from the Note in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the Note at the rate of

1.00%

per annum. Under the terms of the agreement the accrued interest payable is approximately

$2,000

as of

September 30, 2020.

The Borrower

may

apply for forgiveness of amount due under the Note, in an amount equal to the sum of qualified expenses under the PPP, which include payroll costs, rent obligations, and covered utility payments incurred during the

eight

weeks following disbursement under the Note. On

June 5, 2020,

the Paycheck Protection Flexibility Act extended the period for qualifying expenses from

eight

weeks to an optional

twenty-four

-week period. The Borrower intends to use the entire proceeds under the Note for such qualifying expenses. 

Subject to any forgiveness under the PPP, the Note matures

two

years following the date of issuance of the Note and includes a period for the

first

six

months during which time required payments of interest and principal are deferred. Beginning on the

seventh

month following the date of the Note, the Borrower is required to make

18

monthly payments of principal and interest. The Note

may

be prepaid at any time prior to maturity with

no

prepayment penalties. The Note provides for customary events of default, including, among others, those relating to breaches of the Borrower's obligations under the Note, including a failure to make payments, any bankruptcy or similar proceedings involving the Borrower, and certain material effects on the Borrower's ability to repay the Note. On

October 7, 2020,

the Company applied for forgiveness of the note payable with the Lender.