On May 31, 2024, Propanc Biopharma, Inc. (the "Company") reported to have entered into and closed a securities purchase agreement (the "Purchase Agreement") with an investor (the "Investor"), pursuant to which the Investor agreed to purchase a convertible promissory note from the Company in the aggregate principal amount of $49,200 (the "Note"), for a purchase price of $41,000 (Filing, 8-K, Propanc, MAY 31, 2024, View Source [SID1234644136]). The Company intends to use the net proceeds therefrom for general working capital purposes.
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The maturity date of the Note is March 30, 2025 and the Note bears a one-time interest charge of fifteen percent (15%) (the "Interest Rate") that shall be applied on the Issuance Date to the Principal ($49,200.00 * fifteen percent (15%) = $7,380.00). Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in five (5) payments, with the first on November 30, 2024 for $28,290.00, and the other four payments on December 30, 2024, January 30, 2025, February 28, 2025, and March 30, 2025, each for $ 7,072.50 (a total payback to the Holder of $56,580.00). The Company shall have a five (5) day grace period with respect to each payment. The Company has right to prepay in full at any time with no prepayment penalty.
The Investor is entitled, at its option, at any time after an Event of Default (as defined in the Note), to convert any or all or any amount of the principal face amount of the Note then outstanding into shares of the Company’s common stock (the "Common Stock") at a price for each share of Common Stock at a price ("Conversion Price") of 65% multiplied by the lowest Trading Price for the Common Stock during the ten (10) Trading Days prior to the Conversion Date (representing a discount rate of 35%).
The Note contains certain events of default, including failure to pay principal and interest when due, failure to timely issue the Conversion Shares, failure to maintain the listing of the Common Stock on at least one of the OTC markets (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an equivalent replacement exchange, failure to comply with its reporting requirements with the U.S. Securities and Exchange Commission, a breach of certain covenants in the Purchase Agreement, default by the Company under any other note issued to the Investor, as well as certain customary events of default set forth in the Note, including, among others, breach of covenants, representations or warranties, insolvency, bankruptcy, and liquidation. Upon an event of default, the Note will become immediately due and payable by the Company.
The foregoing descriptions of each of the Purchase Agreement and the Note do not purport to be complete and are qualified in their entirety by reference to the full text of each of the Purchase Agreement and the Note, which are filed as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K (this "Form 8-K") and are incorporated herein by reference.