TransMedics (NSDQ:TMDX) announced that it issued a promissory note to receive more than $2.2 million under the Paycheck Protection Program (PPP).
The unsecured loan with proceeds of $2,249,280 is scheduled to mature on April 20, 2022, and includes a fixed interest rate of 1% per annum, according to an SEC filing.
Under the PPP, as part of the U.S. government’s Coronavirus Aid, Relief and Economic Security (CARES) Act, 75% of the loan proceeds must be used for payroll purposes, while the remainder can be used for payroll as well or for rent, mortgage interest or utilities.
All or a portion of the loan may be forgiven if all of the company’s employees are retained on the payroll for eight weeks after the date of the loan and it is used within the guidelines of the program. Forgiveness is also based on the company maintaining or quickly rehiring employees and maintaining salary levels. It will be reduced if TransMedics’ full-time headcount declines or salaries and wages decrease. According to the company’s annual report, as of Dec. 28, 2019, TransMedics had 109 employees, most of which were full-time.
Yesterday, the Andover, Mass.–based organ transplant transportation system developer entered into a second amendment to credit agreement with OrbiMed Royalty Opportunities. The amendment provides that TransMedics may incur unsecured indebtedness pursuant to the PPP and in an amount that doesn’t exceed the more than $2.2 million borrowed at any time.
Should this happen, TransMedics would, within 90 days of incurring such indebtedness, apply for forgiveness for a total of at least $2,024,352 and obtain that forgiveness by Oct. 31, 2020.
