AUGMEDIX, INC. : Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (Form 8 -K)

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Item 1.01. Conclusion of a significant definitive agreement

On May 4, 2022 (the “Effective Date”), Augmedix, Inc.a Delaware company (“Augmedix”), and Augmedix operating companya Delaware company (“OpCo”), has entered into a loan and security agreement (the “Loan Agreement“) by and between Augmedix and OpCo as borrowers (individually and collectively, “Borrower”) and Bank of Silicon Valleya California company, as lender (“Lender”). The Loan Agreement provides for a revolving credit facility in an aggregate principal amount equal to the lesser of (i) $5 million and (ii) 80% of eligible accounts (the “Revolving Credit Facility”) and two tranches of term loan advances, consisting of a term loan advance under Tranche A for an aggregate amount in principal up to $15 million and additional term loan advances under Tranche B for an aggregate principal amount of up to $5 million (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “Facilities”). The Borrower’s obligations under the Loan Agreement are secured by first ranking liens on substantially all of the Borrower’s assets. The facilities are expected to expand the borrower’s operating track and provide greater financial flexibility. Proceeds from the initial drawdown under the Term Loan Facility, together with a portion of the borrower’s balance sheet cash, will be used to repay all of the borrower’s outstanding obligations under the credit facility. borrower’s existing facility (“Existing Credit Facility“) provided by Eastward Fund Management, LLC.

Revolving Credit Facility: The stated maturity date of the Revolving Credit Facility is May 4, 2024 (the “RCF Maturity Date”). Interest on borrowings under the Revolving Credit Facility is payable monthly in arrears at an annual variable rate equal to the greater of (a) 3.75% and (b) prime plus 0.50%. The loan agreement requires the borrower to pay the lender a non-refundable commitment fee in respect of the revolving credit facility of $50,000 for each year that the Revolving Credit Facility is outstanding. Upon termination of the Revolving Credit Facility prior to the RCF maturity date, the Borrower is required to pay a termination fee of $100,000.

Term Loan Facility: The stated maturity date of the Term Loan Facility is June 1, 2025provided that, if the Borrower achieves certain performance milestones as set out in the Loan Agreement, the maturity date of the Term Loan Facility will be automatically extended to December 1, 2025 (the “Term Loan Maturity Date”). Interest on borrowings under the Term Loan Facility is payable monthly in arrears at an annual variable rate equal to the greater of (a) 3.25% and (b) prime plus 0.00 %. The interest rate under the term loan facility is lower than the existing credit facility and highlights the increase in maturity of the borrower and will allow the borrower to save $1.3 million interest charges over the next twelve months. The term loan facility bears interest only up to July 1, 2023
provided that if the borrower achieves certain performance milestones, the amortization date automatically extends to January 1, 2024. The term loan facility extends by Augmedix interest-only period of at least nine months, and possibly fifteen months, against the existing credit facility. The Loan Agreement permits the Borrower to prepay all borrowings under the Term Loan Facility provided that the Borrower, among other things, pays a prepayment fee of (a) 3.00% the principal amount outstanding of borrowings under the Term Loan Facility at the time of such prepayment if it occurs before the first anniversary of the Effective Date, (b) 2.00% of the principal amount outstanding borrowings under the Term Loan Facility at the time of such prepayment if it occurs on the first anniversary of the Effective Date or after the Effective Date but before the second anniversary of the Effective Date effective date, and (c) 1.00% of the outstanding principal amount of borrowings under the Term Loan Facility at the time of such prepayment if it occurs on or after the second anniversary of the date of entry into force but before the expiry date of the facility term loan.

The loan agreement contains customary restrictions and covenants applicable to the borrower and its subsidiaries. In particular, the Loan Agreement contains a financial covenant which provides that if the Borrower fails to maintain minimum cash and cash equivalents in the amount of (a) not less than $25,000,000 (prior to any tranche B advance) and (b) $30,000,000 (following any Tranche B advance), the borrower is then required to maintain certain minimum income requirements as set out in the loan agreement, which will be measured on a 3 month basis and tested quarterly. If the Borrower has failed to maintain the minimum cash and cash equivalents set forth in the preceding sentence, instead of being subject to the minimum income requirements, the Borrower has the ability to remedy such failure to maintain minimum cash and cash equivalents by providing evidence satisfactory to Lender that Borrower has raised at least $10,000,000 the net cash proceeds from the sale of the Borrower’s equity interests. The loan agreement also contains customary covenants which limit, among other things, the ability of the borrower and its subsidiaries to (i) incur debts, (ii) incur liens on their property, (iii) pay dividends or make other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily or early repay certain debts and (viii) enter into transactions with companies affiliates, in each case subject to certain exceptions. The Loan Agreement contains customary representations and warranties and events of default.



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The above summary of the terms of the Loan Agreement does not purport to be complete and is subject to and qualified in its entirety by the full text of the Loan Agreement, which is attached to this current Report on Form 8-K in as Schedule 10.1 and incorporated herein by reference.

Section 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant

The information in Section 1.01 of this Current Report on Form 8-K is incorporated by reference into this Section 2.03.

Section 3.02. Unrecorded sales of Equity securities

Under the loan agreement, Augmedix issued to the Lender a stock purchase warrant, dated on the Effective Date (the “Warrant”), to purchase up to 48,295 shares of by Augmedix ordinary actions, $0.0001 par value per share, exercisable at any time during a period of approximately seven years from the Effective Date, at an exercise price of $2.38 per share, payable in cash or cashless according to the formula set out in the Warrant.

The issue of the Warrant was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and/or the Regulations D promulgated thereunder. Augmedix relied on the above exemption from registration based in part on representations made by the lender, including the statement regarding the lender’s status as an accredited investor, as that term is defined in the rule 501(a) of the Securities Act, and the investment intention of the lender.

The above summary of the terms of the engagement does not purport to be complete and is subject to and qualified in its entirety by the full text of the engagement, which is attached to this current report on Form 8-K as Exhibits 10.2 and incorporated herein by reference.

Section 9.01. Financial statements and supporting documents




 (d) Exhibits.




Exhibit No.                                Description
10.1            Loan and Security Agreement by and among Augmedix, OpCo and Lender
              dated as of May 4, 2022

10.2            Warrant to Purchase Stock by and between Augmedix and Lender dated
              as of May 4, 2022

104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document)




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