Item 1.01 Entry into a Material Definitive Agreement.
On January 15, 2021, Sanara MedTech Inc. (the "Company") entered into a Loan
Agreement (the "Loan Agreement") with Cadence Bank, N.A. ("Cadence"), providing
for a $2.5 million revolving line of credit. The revolving line of credit
matures on January 13, 2023, and is secured by substantially all of the
Company's assets. Any amounts outstanding will bear interest of 0.75% plus the
"Prime Rate" designated in the "Money Rates" section of the Wall Street Journal.
Proceeds from the line of credit are to be used to provide the Company with
additional working capital in support of current assets and for other general
corporate purposes and may not be used for acquisitions.
The line of credit contains customary representations and warranties and
requires the Company to maintain compliance with certain financial covenants,
including, among others, a minimum liquidity of $1,000,000 as of December 31,
2020 and March 31, 2021, a minimum Tangible Net Worth (as defined in the Loan
Agreement) of $1,000,000 and, beginning with the fiscal quarter ending June 30,
2021, a minimum Interest Coverage Ratio (as defined in the Loan Agreement) of
1.5 to 1.0. In addition, the Loan Agreement requires the Company to cause its
shareholders or other persons approved by Cadence to make an equity investment
in the Company of at least $7,500,000 by March 31, 2021. The Loan Agreement also
contains customary events of default. If such an event of default occurs,
Cadence would be entitled to take various actions, including the acceleration of
amounts due under the Loan Agreement. The Company generally may (and must, under
certain circumstances) prepay all or a portion of the principal outstanding on
the revolving line of credit prior to its contractual maturity.
The foregoing description of the Loan Agreement is not complete and is qualified
in its entirety by reference to the Loan Agreement, a copy of which is attached
hereto as Exhibit 10.1 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 8.01 Other Events.
On January 18, 2021, the Company entered into an Equity Exchange Agreement (the
"Exchange Agreement"), effective as of January 14, 2021, with two individuals
who each owned 50% of the outstanding equity interests in Woundyne Medical, LLC
("Woundyne"). Pursuant to the Exchange Agreement, the Company acquired 100% of
the issued and outstanding equity interests of Woundyne in exchange for the
issuance of an aggregate of 29,536 shares of the Company's common stock. The
primary asset acquired by the Company is the Woundyne software platform which
allows data related to chronic and surgical wounds to be tracked, monitored, and
interfaced with the software user's electronic medical records. Woundyne has no
other material assets, liabilities, or revenues.
The sale of the shares of the Company's common stock was exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to the exemption provided in Section 4(a)(2) of the Securities
Act and Rule 506(b) promulgated thereunder as a sale to accredited investors
with whom the Company had a pre-existing relationship.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Loan Agreement, dated January 15, 2021, between the Company, as
Borrower, and Cadence Bank, N.A, as Lender.
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SANARA MEDTECH INC. 
