Item
1.01
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Entry
into a Material Definitive Agreement.
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On
December 2, 2020, Propanc Biopharma, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase
Agreement”) with Geneva Roth Remark Holdings, Inc. (“Geneva”), pursuant to which Geneva purchased
a convertible promissory note (the “December 2020 Geneva Note”) from the Company in the aggregate principal amount
of $78,000, such principal and the interest thereon convertible into shares of the Company’s common stock at the option
of Geneva. The transaction contemplated by the Purchase Agreement closed on or about December 4, 2020. The Company intends
to use the net proceeds ($75,000) from the December 2020 Geneva Note for general working capital purposes.
The
maturity date of the December 2020 Geneva Note is December 2, 2021 (the “Maturity Date”). The December 2020 Geneva
Note shall bear interest at a rate of 8% per annum, which interest may be paid by the Company to Geneva in shares of common stock,
but shall not be payable until the December 2020 Geneva Note becomes payable, whether at the Maturity Date or upon acceleration
or by prepayment, as described below. Geneva has the option to convert all or any amount of the principal face amount of the December
2020 Geneva Note, starting on May 30, 2021 and ending on the later of the Maturity Date and the date of payment of the Default
Amount (as defined below) is paid if an event of default occurs, for shares of the Company’s common stock at the then-applicable
conversion price. The conversion price for the December 2020 Geneva Note shall be equal to the Variable Conversion Price (as defined
herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the
Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 65% multiplied by the
Market Price (as defined herein) (representing a discount rate of 35%). “Market Price” means the average of the lowest
three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete
Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid
price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported
by a reliable reporting service (“Reporting Service”) designated by Geneva (i.e. Bloomberg) or, if the OTC
is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of
the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink
sheets”. Notwithstanding the foregoing, Geneva shall be restricted from effecting a conversion if such conversion, along
with other shares of the Company’s common stock beneficially owned by Geneva and its affiliates, exceeds 4.99% of the outstanding
shares of the Company’s common stock.
The
December 2020 Geneva Note may be prepaid until 180 days from the issuance date. If the December 2020 Geneva Note is prepaid within
60 days of the issuance date, then the prepayment premium shall be 110% of the face amount plus any accrued interest, if prepaid
after 61 days from the issuance date, but less than 91 days from the issuance date, then the prepayment premium shall be 115%
of the face amount plus any accrued interest, if prepaid after 91 days from the issuance date, but less than 121 days from the
issuance date, then the prepayment premium shall be 120% of the face amount plus any accrued interest, if prepaid after 121 days
from the issuance date, but less than 151 days from the issuance date, then the prepayment premium shall be 125% of the face amount
plus any accrued interest, and if prepaid after 151 days from the issuance date, but less than 181 days from the issuance date,
then the prepayment premium shall be 129% of the face amount plus any accrued interest. So long as the December 2020 Geneva Note
is outstanding, the Company covenants not to, without prior written consent from Geneva, 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. Pursuant to the terms of the Purchase Agreement, the Company paid Geneva’s fees and
expenses in the aggregate amount of $3,000.
Other
than as described above, the December 2020 Geneva Note contains certain events of default, including failure to timely issue shares
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 December 2020 Geneva Note. Additional events of default shall include, among others: (i) failure to reserve at least
five times the number of shares issuable upon full conversion of the December 2020 Geneva Note; (ii) bankruptcy, insolvency, reorganization
or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for
the relief of debtors shall be instituted by or against the Company or any subsidiary of the Company; provided, that in the event
such event is triggered without the Company’s consent, the Company shall have sixty (60) days after such event is triggered
to discharge such event, (iii) the Company’s 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, the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the American Stock
Exchange, (iv) The restatement of any financial statements filed by the Company with the SEC at any time after 180 days after
the issuance date for any date or period until this note is no longer outstanding, if the result of such restatement
would, by comparison to the un-restated financial statement, have reasonably constituted a material adverse effect on the rights
of Geneva with respect to this note or the Purchase Agreement, and (v) the Company’s failure to comply with
its reporting requirements of the Securities and Exchange Act of 1934 (the “Exchange Act”), and/or the Company
ceases to be subject to the reporting requirements of the Exchange Act.
In
the event that the Company fails to deliver to Geneva shares of common stock issuable upon conversion of principal or interest
under the December 2020 Geneva Note within three business days of a notice of conversion by Geneva, the Company shall incur a
penalty of $1,000, provided, however, that such fee shall not be due if the failure to deliver the shares is a result of a third
party such as the transfer agent.
Upon
the occurrence and during the continuation of certain events of default, the December 2020 Geneva Note will become immediately
due and payable and the Company will pay Geneva, in full satisfaction of its obligations in the December 2020 Geneva Note an amount
equal to 150% of an amount equal to the then outstanding principal amount of the December 2020 Geneva Note plus any interest accrued
upon such event of default or prior events of default (the “Default Amount”).
The
December 2020 Geneva Note was issued, and any shares to be issued pursuant to any conversion of the December 2020 Geneva 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 description of the Purchase Agreement and the December 2020 Geneva Note does not purport to be complete and is qualified
in their entirety by reference to the full text of the Purchase Agreement and the December 2020 Geneva Note, which are filed as
Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.