PRECISION BIOSCIENCES INC

Item 5. Other Information.

Rule 10b5-1 Trading Plans

On April 25, 2024, Jeff Smith, our Chief Research Officer, entered into a trading plan intended to comply with the affirmative defense conditions under Rule 10b5-1(c) of the Exchange Act. The trading plan provides for sales of only such number of shares of our common stock as are necessary, after payment of applicable broker commissions, to satisfy the applicable tax withholding obligations arising from the vesting and settlement of restricted stock units granted to him. Such sales are to take place on the date on which Mr. Smith first becomes subject to the applicable withholding obligation or the first trading date thereafter. The number of shares of common stock to be sold under Mr. Smith’s Rule 105b-1 plan is dependent on future events which cannot be known at this time, including the future trading price of the Company’s common stock.

2024 Loan and Security Agreement

On July 31, 2024, the Company entered into an amended and restated loan and security agreement (the “2024 Loan and Security Agreement”) with Banc of California (formerly known as Pacific Western Bank) pursuant to which Banc of California provided the Company with a term loan with a principal amount of $22.5 million (the “2024 Term Loan”). The proceeds from the 2024 Term Loan were used to repay the $22.5 million outstanding principal balance under the Revolving Line, and pursuant to the terms of the 2024 Loan and Security Agreement, the Revolving Line was terminated.

The maturity date under the 2024 Loan and Security Agreement is June 30, 2027 (the “2024 Term Loan Maturity Date”). The Company may prepay all or a portion of the amounts due under the 2024 Term Loan without penalty or premium at any time, provided that if the Company refinances the 2024 Term Loan with borrowings from another lender, the Company is required to pay Banc of California an early termination fee of $100,000.

The 2024 Term Loan bears interest at an annual rate equal to the greater of (i) 1.50% below the Prime Rate (as defined in the 2024 Loan and Security Agreement) then in effect or (ii) 4.50%.

Under the terms of the 2024 Loan and Security Agreement, the Company paid a fee of $2,500 upon closing of the 2024 Term Loan. Upon the earliest to occur of the Term Loan Maturity Date, the date that the Company repays the 2024 Term Loan and elects to terminate the 2024 Term Loan, and the date that the 2024 Term Loan becomes due or Banc of California elects to terminate the 2024 Loan and Security Agreement in connection with an event of default thereunder, the Company is required to pay Banc of California a fee of $225,000.

Under the terms of the 2024 Loan and Security Agreement, the Company granted Banc of California a security interest in a cash security account at Banc of California (the “Cash Security Account”), and Banc of California agreed to terminate all other security interests it has in the Company’s assets. The Company is required to maintain an aggregate unencumbered balance in the Cash Security Account at least equal to the outstanding principal amount of the 2024 Term Loan then outstanding.

The 2024 Loan and Security Agreement includes customary representations, warranties and covenants (affirmative and negative), including restrictions on mergers by the Company with and into other companies and incurrence of secured indebtedness, in each case, subject to specified exceptions. Certain of the restrictive covenants, including covenants related to capital expenditures, transactions with affiliates, subordinated debt, inventory and equipment, and encumbrances on the Company's assets (other than the Cash Security Account), included in the 2019 Loan and Security Agreement were deleted.

The 2024 Loan and Security Agreement also includes standard events of default, including in the event of a material adverse change. Upon the occurrence of an event of default, Banc of California may declare all outstanding obligations immediately due and payable, take such other actions as are set forth in the 2024 Loan and Security Agreement and increase the interest rate otherwise applicable to the amount outstanding under the 2024 Loan and Security Agreement by an additional 3.00%.

The foregoing description of the 2024 Loan and Security Agreement does not purport to be complete and is qualified in its entirety by reference to the 2024 Loan and Security Agreement, a copy of which is filed as Exhibit 10.7 hereto and incorporated into this Item 5 by reference.