Theralink Technologies : Accelaration/Increase of Financial Obligation - Form 8-K

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

As previously announced, on November 29, 2022 and January 27, 2023,Theralink Technologies, Inc. (the "Company") sold tocertain accredited purchasers 10% Original Issue Discount Senior Secured Convertible Debentures (the "Debentures") in an aggregate principal amount of approximately$4,400,000 and agreed to convert certain existing securities into additional Debentures in an aggregate principal amount of $13.6 million, resulting in the issuance of approximately $18.0 million in Debentures. The Company's obligations under the Debentures are secured by a first priority lien on all of the assets of the Company pursuant to that certain Security Agreement, dated November 29, 2022 by and among the Company, the holders of the Debentures and Cavalry Fund I Management LLC as the Collateral Agent.

The Debentures were originally set to mature on November 29, 2023 ("Maturity Date"), and subject to a three-month extension, at the sole discretion of the Company, pursuant to Section 2(e) of the Debentures. On November 27, 2023, the Company announced its intention to automatically extend the Maturity Date of the Debentures for an additional three (3) month period such that the Debentures would due and payable on February 29, 2024 and as a result, per the terms of the Debentures, the outstanding principal amount of the Debentures on the date of extension, plus accrued and unpaid interest thereon and all other amounts, costs, expenses and liquidated damages due in respect of this Debenture at such date was increased by 5%.

On February 29, 2024, the Debentures became due and payable and the Company failed to pay the principal amount of the Debentures. As a result, an Event of Default occurred under Section 8(a)(i) of the Debentures. Upon the occurrence of an Event of Default, pursuant to Section 8(b) of the Debentures, the outstanding principal amount of the Debenture, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through February 29, 2024, became, at the election of the holders of the Debentures, immediately due and payable in cash at a mandatory default amount of the sum of (a) 130% of the outstanding principal amount of the Debentures, plus (b) 130% of accrued and unpaid interest hereon, and (c) 130% of all other amounts, costs, expenses and liquidated damages due in respect of this Debentures. After February 29, 2024, the interest rate on the Debentures shall accrue at an interest rate equal to the lesser of 16% per annum or the maximum rate permitted under applicable law until the amounts due under the Debentures are fully paid. The current balance due under the Debentures is approximately $20.1 million.