RETA Reata Pharmaceuticals Inc

Item 2.03.Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Obligation of a Registrant.

On December 20, 2019, the Company exercised its option to borrow an additional $75.0 million (the “Term B Loan”) pursuant to the First Amendment to Amended and Restated Loan and Security Agreement, dated as of October 9, 2019 (the “Loan Agreement”), with Oxford Finance LLC, as the collateral agent and lender (“Oxford”), and Silicon Valley Bank, as a lender (together with Oxford, the “Lenders”). The Company is required to make a final payment of 2.00% of the Term B Loan, payable on the earliest of June 1, 2023 (the “Maturity Date”), the acceleration of the Term B Loan, or the prepayment of the Term B Loan. The Company may prepay all, but not less than all, of the borrowed amounts under the Term B Loan upon 10 days advance written notice to the Lenders, provided that the Company will be obligated to pay a prepayment fee. The prepayment fees payable by the Company for the Term B Loan are (i) 4.00% at the interest in effect on the date of prepayment of the Term B Loan if prepaid on or before the first anniversary of the funding date, (ii) 3.00% of the Term B Loan if prepaid after the first anniversary of the funding date and on or before the second anniversary of the funding date, (iii) 1.50% of the Term B Loan if prepaid after the second anniversary of the funding date and on or before the third anniversary of the funding date, and (iv) 0.00% of the Term B Loan if prepaid after the third anniversary of the funding date and prior to the Maturity Date.

Amounts drawn under the Loan Agreement bear interest at a floating per annum rate equal to the sum of (i) the greater of (x) the 30-day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, which shall not exceed 4.50%, and (y) 1.91% plus (ii) 7.79%. Notwithstanding the foregoing, the interest rate shall not be less than 9.70% nor greater than 12.29%.

Cautionary Note Regarding Forward-Looking Statements

This Current Report on Form 8-K and oral statements made with respect to information contained in this report may contain certain disclosures that contain “forward-looking statements.”  You can identify forward-looking statements because they contain words such as “believes,” “will,” “may,” “aims,” “plans,” “model,” and “expects.”  Forward-looking statements are based on the Company’s current expectations and assumptions.  Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance.  Important information regarding risks and other cautionary information can be found in the Company’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, under the caption “Risk Factors.”  The forward-looking statements speak only as of the date made and, other than as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.