On March 31, 2023, ImmunityBio, Inc. (the "Company") executed a $30.0 million convertible promissory note with Nant Capital, LLC ("Investor"), an entity affiliated with Dr. Patrick Soon-Shiong, our Executive Chairman and Global Chief Scientific and Medical Officer (Filing, 8-K, ImmunityBio, MAR 31, 2023, View Source [SID1234629662]). This note bears interest at Term Secured Overnight Financing Rate ("Term SOFR") plus 8.0% per annum. The accrued interest shall be payable quarterly on the last business day of March, June, September and December, commencing on June 30, 2023. The outstanding principal amount and any accrued and unpaid interest are due on the earlier of (i) December 31, 2023 or (ii) upon the occurrence and during the continuance of an Event of Default (as defined in the note). We may prepay the outstanding principal amount, together with any accrued interest, at any time, in whole or in part, without premium or penalty, upon five (5) days written notice to Investor. The note is convertible at Investor’s option following the date that is the trading day immediately prior to the opening of the Company’s next open trading window as determined by the Company’s board of directors in accordance with the Company’s Insider Trading Policy (the "Conversion Price Date"), in whole but not in part, into common stock of the Company, at a conversion price in accordance with the following formula: equal to the greater of (i) the Nasdaq Official Closing Price and (ii) the consolidated closing bid price of the Company’s common stock on the Conversion Price Date.
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We received net proceeds of $29.85 million from this financing, net of a $150,000 origination fee (0.5%) paid to the Investor, which we intend to use, together with other available funds, to progress our pre-commercialization efforts and clinical development programs, fund other research and development activities, for capital expenditures, and for other general corporate purposes. We may also use a portion of the net proceeds to license intellectual property or to make acquisitions or investments.
The foregoing is only a brief description of the material terms of the note, and does not purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to the note that is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.