Item
1.01
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Entry
into a Material Definitive Agreement.
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Securities
Purchase Agreement
Propanc
Biopharma, Inc., a Delaware corporation (the “Company”), entered into a Securities Purchase Agreement (the “Securities
Purchase Agreement”) with Auctus Fund LLC, a Delaware limited liability company (“Auctus”), whereby Auctus purchased
from the Company, for a purchase price of $550,000 (the “Purchase Price”) (i) a Convertible Promissory Note,
in the principal amount of $550,000.00 (the “Note”), (ii) a Common Stock Purchase Warrant permitting the holder
to purchase 450,000 shares of common stock of the Company (“Warrant No. 1”), (iii) a Common Stock Purchase
Warrant permitting the holder to purchase 300,000 shares of common stock of the Company (“Warrant No. 2”), and (iv)
a Common Stock Purchase Warrant permitting the holder to purchase 225,000 shares of common stock of the Company (“Warrant
No. 3” and, together with Warrant No. 1 and Warrant No. 2, the “Warrants”). On September 3, 2019 (the “Closing
Date”), Auctus delivered the Purchase Price to the Company as payment for the Note and the Warrants.
The
Securities Purchase Agreement contains such representations, warranties and covenants as are typical for a transaction of this
nature.
Convertible
Promissory Note
The
Note became effective as of the Closing Date, and is due and payable on August 30, 2020 (the “Maturity Date”). The
Note entitles Auctus to 10% interest per annum (the “Interest Rate”). Upon an Event of Default (as defined in the
Note), the Note entitles Auctus to interest at the rate of 24% per annum. The Note may be converted into shares of the Company’s
common stock at a conversion price equal to 0.6 multiplied by the lowest closing bid price for the Company’s common stock
over the ten (10) day period immediately preceding the delivery of any notice of conversion (representing a 40% discount). Auctus
may not convert the Note to the extent that such conversion would result in beneficial ownership by Auctus and/or its affiliates
of more than 4.99% of the issued and outstanding common stock of the Company. If the Company prepays the Note prior to August
13, 2020, the Company must pay an amount equal to 1.35 multiplied by all of the principal and interest then outstanding. After
such date, the Company shall have no further right of prepayment.
In the event of a default, at the option of Auctus, it may consider the Note immediately due and payable.
Common
Stock Purchase Warrants
The
Warrants became effective as of the Closing Date. Warrant No. 1 permits the holder to purchase 450,000 shares of common stock
of the Company for an exercise price of $2.25, subject to adjustment as provided therein. Warrant No. 2 permits the holder to
purchase 300,000 shares of common stock of the Company for an exercise price of $3.33, subject to adjustment as provided therein.
Warrant No. 3 permits the holder to purchase 225,000 shares of common stock of the Company for an exercise price of $4.50, subject
to adjustment as provided therein. Each of the Warrants may be exercised at any time on or prior to the five (5) year anniversary
thereof.
Registration
Rights Agreement
In
connection with the Securities Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration
Rights Agreement”) pursuant to which the Company agreed to register with the United States Securities and Exchange Commission
(“SEC”) on a Registration Statement on Form S-1 (the “Registration Statement”) all of the shares of Common
Stock into which the Note is convertible and the Warrants are exercisable, as well as any additional shares of the Company’s
common stock that have been issued or will be issued pursuant to the Securities Purchase Agreement and/or Registration Rights
Agreement. The Registration Rights Agreement provides that the Registration Statement will be filed with the SEC within sixty
(60) days following the execution of the Registration Rights Agreement and that the Company will cause the Registration Statement
to become effective within one hundred fifty (150) days following the execution of the Registration Rights Agreement.
The Registration Rights Agreement contains
such representations, warranties and covenants as are typical for this type of transaction.
The foregoing provides only brief descriptions
of the material terms of the Securities Purchase Agreement, the Note, the Warrants and the Registration Rights Agreement, and
does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are
qualified in their entirety by reference to the full text of the Securities Purchase Agreement, the Note, the Warrants and the
Registration Rights Agreement, respectively, filed as exhibits to this Current Report on Form 8-K, and are incorporated
herein by reference.