Item 1.01 Entry into a Material Definitive Agreement.
On February 14, 2023, Propanc Biopharma, Inc. (the "Company"), entered into a
securities purchase agreement (the "Purchase Agreement") with ONE44 Capital LLC
("ONE44"), pursuant to which ONE44 purchased a convertible promissory note (the
"Note") from the Company in the aggregate principal amount of $111,111, such
principal and the interest thereon convertible into shares of the Company's
common stock at the option of ONE44. The transaction contemplated by the
Purchase Agreement closed on February 16, 2023. The Company intends to use the
net proceeds ($100,000) from the Note for general working capital purposes. The
Note contains an original issue discount amount of $11,111.
The maturity date of the Note is February 14, 2024 (the "Maturity Date"). The
Note bears interest at a rate of 10% per annum. Interest is payable only in
shares of Company's common stock (the "Common Stock") and is due and payable
only contemporaneously with a payment of principal, whether at the Maturity Date
or upon acceleration or by prepayment, as described below. ONE44 is entitled, at
its option, at any time after the six-month anniversary of the Note, to convert
all or any amount of the principal face amount of this Note then outstanding
into shares of Common Stock at a per-share price equal to 60% of the lowest
trading price of the Common Stock, as reported by the OTC Markets Group (if the
shares of the Common Stock are then quoted thereon) or by any securities
exchange upon which the Common Stock is then listed, for the ten prior trading
days including the day upon which a Notice of Conversion is received by the
Company. In the event the Company experiences a DTC "Chill" on its shares, the
conversion price shall then be decreased to 50% instead of 60% while that
"Chill" is in effect. Notwithstanding the foregoing, ONE44 shall be restricted
from effecting a conversion if such conversion, along with other shares of
Common Stock then beneficially owned by ONE44 and its affiliates, exceeds 4.99%
of the outstanding shares of Common Stock (which may be increased up to 9.9% of
the outstanding shares of Common Stock upon 60 days' prior written notice by
ONE44 to the Company).
The Company may prepay the principal of the Note and accrued interest until 180
days from the issuance date (August 13, 2023). If the Note is prepaid within 60
days of the issuance date (April 15, 2023), then the prepayment premium shall be
120% of the face amount plus any accrued interest. If the Note is prepaid after
60 days from the issuance date, but less than 120 days from the issuance date
(June 14, 2023), then the prepayment premium shall be 130% of the face amount
plus any accrued interest. If the Note is prepaid after 120 days from the
issuance date, up to 180 days from the issuance date (August 13, 2023), then the
prepayment premium shall be 135% of the face amount plus any accrued interest.
So long as the Note is outstanding, the Company covenants not to, without prior
written consent from ONE44, sell, lease or otherwise dispose of all or
substantially all of its assets outside the ordinary course of business which
would render the Company a "shell company" as such term is defined in Rule 144.
Other than as described above, the Note contains certain events of default,
including failure to issue shares timely upon receipt of a notice of conversion,
as well as certain customary events of default, including, among others, breach
of covenants, representations, or warranties, insolvency, bankruptcy,
liquidation, and failure by the Company to pay the principal and interest due
under the Note. Upon the occurrence and during the continuation of certain
events of default, the Note will accrue an annual interest rate of 24% or, if
such rate is usurious or not permitted by current law, then at the highest rate
of interest permitted by law.
The Note was issued, and any shares of Common Stock to be issued pursuant to any
conversion of the Note shall be issued, in a private placement in reliance upon
an exemption from registration provided by Section 4(a)(2) of the Securities Act
and/or Regulation D promulgated thereunder.
The foregoing descriptions of the Note and the Purchase Agreement do not purport
to be complete and each is qualified in its entirety by reference to the full
text of the Note and the Purchase Agreement, which are filed as Exhibits 4.20
and 10.41, respectively, to this Current Report on Form 8-K and are incorporated
herein by reference.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement by a Registrant.
The information set forth in Item 1.01 above is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit No. Description
4.20* 10% Convertible Redeemable Note, dated February 14, 2023, issued
by the Company to ONE44 Capital LLC
10.41* Securities Purchase Agreement, dated February 14, 2023, by and
between the Company and ONE44 Capital LLC
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Filed herewith
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