On December 11, 2020, Seelos Therapeutics, Inc. (the "Company") reported that it entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with Lind Global Asset Management II, LLC (the "Investor") pursuant to which, among other things, on December 11, 2020, the Company issued and sold to the Investor, in a private placement transaction (the "Private Placement"), in exchange for the payment by the Investor of $10,000,000, (1) a convertible promissory note (the "Note") in an aggregate principal amount of $12,000,000 (the "Principal Amount"), which will bear no interest and mature on December 11, 2022 (the "Maturity Date"), and (2) 975,000 shares (the "Closing Shares") of common stock of the Company, par value $0.001 per share ("Common Stock") (Filing, 8-K, Apricus Biosciences, DEC 11, 2020, View Source [SID1234572982]).

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At any time following June 11, 2021, and from time to time before the Maturity Date, the Investor shall have the option to convert any portion of the then-outstanding Principal Amount of the Note into shares of Common Stock at a price per share of $1.60, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions (the "Conversion Price"). Prior to June 11, 2021, the Company shall have the right to prepay up to sixty-six and two-thirds percent (662/3%) of the then-outstanding Principal Amount of the Note with no penalty. On or after July 11, 2021, the Company shall have the right to prepay up to the then-outstanding Principal Amount of the Note with no penalty; however, if the Company exercises such prepayment right, the Investor will have the option to convert up to thirty-three and one-third percent (331/3%) of the amount that the Company elects to prepay at the Conversion Price.

The Company intends to use the proceeds from the Private Placement for general corporate purposes and to advance the development of its product candidates.

Subject to certain exceptions, the Company will be required to direct proceeds from any subsequent debt financings (including subordinated debt, convertible debt or mandatorily redeemable preferred stock but other than purchase money debt or capital lease obligations or other indebtedness incurred in the ordinary course of business) to repay the Note, unless waived by the Investor in advance.

Beginning on June 9, 2021, the Note will amortize in eighteen monthly installments equal to the quotient of (i) the then-outstanding Principal Amount of the Note, divided by (ii) the number of months remaining until the Maturity Date. All amortization payments shall be payable solely in cash, plus a 2% premium.

In conjunction with the Securities Purchase Agreement and the Note, on December 11, 2020, the Company and the Investor entered into a security agreement (the "Security Agreement"), which provides the Investor with a first priority lien on the Company’s assets and properties.

Until December 11, 2021, the Investor will, subject to certain exceptions, have the right to participate for up to 10% of any Common Stock equity financing of the Company.

The Securities Purchase Agreement contains customary representations and warranties of the Company and the Investor. In addition, the Note contains restrictive covenants and event of default provisions that are customary for transactions of this type.

The foregoing summaries of the Securities Purchase Agreement, the Note and the Security Agreement do not purport to be complete and are qualified in their entirety by reference to the copies of the Securities Purchase Agreement and Form of Note filed herewith as Exhibits 10.1, 4.1 and 10.2, respectively.

The representations, warranties and covenants contained in the Securities Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Securities Purchase Agreement, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Securities Purchase Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Securities Purchase Agreement, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Securities and Exchange Commission (the "SEC").