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In advance of this transaction, Evoke repaid the remaining balance of its loan with Silicon Valley Bank of $2.4 million. The facility will support general corporate and working capital purposes and capital expenditures.
"Evoke is pleased to have entered into this loan facility with Square 1 Bank as it provides access to additional capital as we advance our Phase 3 trial for EVK-001 for the relief of symptoms of diabetic gastroparesis in women," said Matt D'Onofrio, Executive Vice President and Chief Business Officer of Evoke. "We continue to execute on our clinical plans, and while we maintain our expectation that the proceeds from our initial public offering will fund a substantial portion of our EVK-001 clinical development program, we also believe it is strategically important to have access to additional financing to strengthen our balance sheet."
The loan agreement has a term of 3.5 years with either (A) a fixed interest rate of 5.5% or (B) a variable interest rate equal to the greater of (1) the prime rate plus 1.75%, or (2) 5.0%, to be determined by Evoke at the time of the initial borrowing. Evoke has not drawn down on the facility. The loan facility includes an 18-month interest-only advance period during which the Company may draw funds at its option, subject to conditions for funding, followed by a 24-month amortization period with equal monthly payments of principal plus interest. In connection with the funding of each term loan under the agreement, Evoke will issue to Square 1 Bank a warrant to purchase up to the number of shares of its common stock equal to (A) 3% of the principal amount of the applicable term loan credit extension over (B) the initial exercise price, which will be the closing price of Evoke's common stock on the day of such funding. The facility includes affirmative and negative covenants of Evoke.