ISPECIMEN INC. : Entering into a Material Definitive Agreement, Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement, Financial Statements and Exhibits (Form 8-K)

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Item 1.01. Conclusion of a significant definitive agreement.

iSpecimen Inc.a Delaware company (the “Company”), has entered into a waiver agreement with Western Alliance Bank (“Western Alliance Bank“), date April 29, 2022 (the “Waiver”). Please see Section 2.04 for a description of the waiver which is incorporated by reference into this Section 1.01.

Item 2.04. Trigger events that accelerate or increase a direct cash flow

           Obligation or an Obligation under an Off-Balance Sheet Arrangement.



As stated earlier, on August 13, 2021 (“Closing Date”), the Company has entered into a Loan and Guarantee Agreement (the “Loan and Guarantee Agreement”) with Western Alliance Bankunder which, Western Alliance Bank agreed to provide the Company with a term loan facility in the maximum principal amount of
$5,000,000including (i) a $3,500,000 term loan advanced at the closing date and (ii) a $1,500,000 term loan available at the request of the Company, subject to certain conditions for the period of 18 months following the closing date. Amounts unpaid under the loan and guarantee agreement bear interest at an annual rate equal to the prime rate plus 0.75%. In addition, the Company is also required to pay customary fees and expenses.

The loan and guarantee agreement requires the payment of interest only by
February 2023. Starting on March 10, 2023, the Company is required to make monthly installments of principal and interest, according to a 30-month amortization schedule. All amounts unpaid under the Loan and Guarantee Agreement will become due and payable on August 10, 2025. The obligations under the Loan and Guarantee Agreement are secured by substantially all of the Company’s assets, except for the Company’s intellectual property.

The loan and guarantee agreement includes financial covenants, including requirements that the company achieve certain levels of EBDA and maintain a certain adjusted quick ratio. The Loan and Guarantee Agreement also includes customary negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain liens, investments, acquisitions and disposals of assets, as well as customary representations and warranties, positive clauses and events of default, including cross defaults and a change of control default.

On April 25, 2022the Company has become aware that an event of default of the Company has occurred due to the breach by the Company of the financial covenant requiring that the EBDA (losses) of the last three months of the Company, tested the last day of each quarter, does not deviate negatively more than $500,000 of the projected EBDA for the three months ended March 31, 2022 (the “Event of Default”), as set forth in the annual operating budget approved by the Board of Directors of the Company and delivered to Western Alliance Bank in accordance with the loan and guarantee agreement.

Following the Default Event, Western Alliance Bank had the right to accelerate the outstanding balance of the Loans under the Loan and Guarantee Agreement, which as of April 25, 2022been $3,506,197.85including all accrued and unpaid interest and any other amounts due to Western Alliance Bank
including, without limitation, fees, expenses and penalties, and may increase the interest rate applicable under the Loan and Guarantee Agreement by 5.00% from the occurrence and for the duration of the case of default.

The Company has not received any Western Alliance Bank a notice of default or a notice of repayment with respect to the outstanding balance of the loan. On April 29, 2022the company and Western Alliance Bank entered into the Waiver, pursuant to which, Western Alliance Bank has agreed to waive the Event of Default and the Company has agreed to release Western Alliance Bank of all claims from the beginning of the period up to and including the date of waiver, whether relating to the loan and security agreement, covenants or any other claims the company has ever had or has currently against Western Alliance Bank.

The foregoing description of the Waiver is qualified in its entirety by reference to the full text of the Waiver, which is attached as Exhibit 10.1 to this current Report on Form 8-K.

Item 9.01. Financial statements and supporting documents.




(d) Exhibits.



Exhibit No.                                 Description
  10.1          Waiver Agreement, dated April 29, 2022, by and between the Company
              and Western Alliance Bank
104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document)

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