Item 8.01 Other Events.

As previously disclosed in a Current Report on Form 8-K filed April 23, 2020, Avid Bioservices, Inc. (the "Company") entered into a promissory note dated April 17, 2020 (the "Note") with City National Bank (the "Lender") evidencing a loan pursuant to the U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") of the Coronavirus Aid, Relief, and Economic Security Act of approximately $4.4 million (the "PPP Loan"). At the time the Company applied for the PPP Loan, it qualified to receive funds pursuant to the then published PPP qualification and certification requirements.

On April 23, 2020, the SBA, in consultation with the Department of Treasury, issued new guidance that creates uncertainty regarding the qualification requirements for a PPP Loan (the "New Guidance"). Out of an abundance of caution and in light of the New Guidance, the Company determined it appropriate to pay off the entire amount of the PPP Loan, none of which had been utilized by the Company. Accordingly, the PPP Loan was paid in full to the Lender on May 12, 2020, resulting in the termination of the Note.

© Edgar Online, source Glimpses