SUBSEQUENT EVENT

3 Months Ended

Mar. 31, 2024

15)	SUBSEQUENT EVENTS

On May 3, 2024, the Company received a notice from the Sublessor of the Somerville, Massachusetts facility regarding past due rent payments of approximately $2.3 million, including its share of amounts related to property taxes and common area maintenance costs, that the Company has not paid for the months of February, March, April and May 2024. Failure to pay the past due rent payments in full, plus approximately $70,000 in late fees and interest, within five business days from the date of the notice constitutes an event of default under the sublease. The Company had discussions with the Sublessor subsequent to receiving the notice about remedying the event of default, and as a result of those discussions, did not pay any of the past due rent payments or any of the late fees or interest within such five business day period. The Company also has been stet discussions with the Sublessor to renegotiate the terms of the sublease, which may include, among other things, deferment of rent payments and/or a reduction of the lease term, square footage, and/or base rent.

If an event of default exists under the sublease, beyond applicable notice and cure periods, the Sublessor may draw down the letter of credit and use, apply or retain such portion of the proceeds from the letter of credit as may be necessary (i) for the payment of any rent or any other sum in default, (ii) for the payment of any other amount which the Sublessor may, in accordance with the terms of the sublease, spend or become obligated to spend by reason of the Company’s default, or (iii) to compensate the Sublessor, in accordance with the terms of the sublease, for any other loss or damage which the Sublessor may suffer by reason of the Company’s default, including costs and reasonable attorneys’ fees incurred by the Sublessor to recover possession of the premises following a default by the Company. As of the date of filing of this report, the Sublessor has not drawn down on the letter of credit. The use or application of the proceeds from the letter of credit or any portion thereof does not prevent the Sublessor from exercising any other right or remedy provided under the sublease or under law. If any portion of the letter of credit is so used or applied, the Company must, upon demand therefor, amend the letter of credit, provide an additional letter of credit or deposit cash with the Sublessor, in each such case in an amount sufficient to restore the security deposit within 10 business days to the appropriate amount. See the risk factor titled, “Our monthly rent payment obligations under our sublease are significant and we currently owe approximately $2.3 million in past due rent. An event of default under our sublease could be an event of default under our outstanding convertible notes,” in Item 1A. Risk Factors of Part II of this report.