ITEM 1.01.
Entry into a Material Definitive Agreement.
On
May
2
8
, 2019
, Pulse Biosciences, Inc. (the “Company”) entered into a First Amendment to Lease (the “Lease Amendment”) with Hayward Point Eden I Limited Partnership, a Delaware limited liability company (the “Landlord”). The Lease Amendment amends the Company’s existing lease with the Landlord, dated January 26, 2017 (the “Existing Lease”), pursuant to which the Company has leased approximately fifteen thousand six hundred and ninety-seven (15,697) rentable square feet located at 3955 Point Eden Way, Hayward, California (the “Premises”).
The Lease Amendment provides for the expansion of the Premises by approximately thirty-four thousand six hundred and one (34,601) rentable square feet (the “Expansion Premises”) and the extension of the term of the Existing Lease.
The Company will occupy the Expansion Premises in two phases. The “Phase 1” portion of the Expansion Premises contains approximately thirteen thousand two hundred and eighty (13,280) of rentable square feet and the “Phase 2” portion of the Expansion Premises contains approximately twenty-one thousand three hundred and twenty-one (21,321) of rentable square feet.
Upon inclusion of the Expansion Premises, the Company will lease approximately fifty thousand two hundred and ninety-eight (50,298) rentable square feet from the Landlord (the “Entire Premises”). The Expansion Premises will also be used for the Company’s corporate headquarters and principal operating facility.
The term of the lease for the Expansion Premises is expected to commence on the date the Landlord delivers Phase 1 of the Expansion Premises to the Company “Ready for Occupancy,” as defined in the Lease Amendment (the “Expansion Commencement Date”) and runs contemporaneously with the term of the lease for the existing space (the “Lease Term”). The Lease Amendment extends the term of the lease with respect to the Entire Premises to expire on the date that is ten (10) years after the Expansion Commencement Date. In addition,
under the Lease Amendment, the Company has two options to extend the Option Term, as defined in the Lease Amendment, by
seven
(
7
) years upon written notice not more than twelve (12) months nor less than nine (9) months prior to the expiration of the lease, with monthly payments equal to the “Fair Rental Value” as defined in the Existing Lease.
The Company will continue to pay base monthly rent for the existing premises in accordance with the terms of the Existing Lease.
The Expansion Premises’ b
ase monthly rent shall be abated for the first four (4) months of the Lease Term and thereafter will be $2.25 per rentable square foot for the Expansion Premises, with specified annual increases occurring thereafter until reaching approximately $3.819 per rentable square foot during the last six (6) months of the Lease Term. The total base rent beginning on the Expansion Commencement Date through the minimum term of the lease is not calculable at this time since the total base rent will depend on the date the Phase 2 portion of the Expansion Premises is “Ready for Occupancy.” In addition to base rent, the Company will continue to be
required to reimburse the Landlord for certain expenses during the Lease Term.
Under the Lease Amendment, the Company is required to increase its refundable security deposit by
$264,264.88, to be equal to $364,937.68.
The foregoing description of the terms of the
Lease Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the
Lease Amendment, a copy of which is attached hereto as Exhibit 10.19
and is incorporated herein by reference.