Item
1.01 Entry into a Material Definitive Agreement.
On
April 12, 2022, Propanc Biopharma, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase
Agreement”) with Sixth Street Lending LLC (“Sixth Street”), pursuant to which Sixth Street purchased a convertible
promissory note (the “Note”) from the Company in the aggregate principal amount of $68,750, such principal and the interest
thereon convertible into shares of the Company’s common stock at the option of Sixth Street. The transaction contemplated by the
Purchase Agreement is expected to close on or about April 18, 2022. The Company intends to use the net proceeds ($65,000) from the Note
for general working capital purposes.
The
maturity date of the Note is April 12, 2023 (the “Maturity Date”). The Note shall bear interest at a rate of 8% per annum,
which interest may be paid by the Company to Sixth Street in shares of common stock, but shall not be payable until the Note becomes
payable, whether at the Maturity Date or upon acceleration or by prepayment, as described below. Sixth Street has the option to convert
all or any amount of the principal face amount of the Note, beginning on the date which is one hundred eighty (180) days following the
date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined below),
each in respect of the remaining outstanding amount of this Note, to convert all or any part of the outstanding and unpaid amount of
this Note into common stock at the then-applicable conversion price. The conversion price for the 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
(as defined below) 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 designated by Sixth Street (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”. “Trading Day” shall mean any day
on which the common stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on
which the common stock is then being traded. Notwithstanding the foregoing, Sixth Street shall be restricted from effecting a conversion
if such conversion, along with other shares of the Company’s common stock beneficially owned by Sixth Street and its affiliates,
exceeds 4.99% of the outstanding shares of the Company’s common stock.
The
Note may be prepaid until 180 days from the issuance date. If the 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 60 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
90 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 120 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 150 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 Note is outstanding, the Company covenants not to, without prior written consent from Sixth Street, 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 Sixth Street’s
legal fees and due diligence expenses in the aggregate amount of $3,750.
Other
than as described above, the 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 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 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 Sixth Street 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 Sixth Street shares of common stock issuable upon conversion of principal or interest
under the Note within three business days of a notice of conversion by Sixth Street, the Company shall incur a penalty of $1,000 per
day, 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 Note will become immediately due and payable and the Company
will pay Sixth Street, in full satisfaction of its obligations in the Note an amount equal to 150% of an amount equal to the then outstanding
principal amount of the Note plus any interest accrued upon such event of default or prior events of default (the “Default Amount”).
The
Note was issued, and any shares 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 description of the Note and the Purchase Agreement does not purport to be complete and is qualified in their entirety by reference
to the full text of the Note and the Purchase Agreement, which are filed as Exhibits 4.1 and 10.1, respectively, to this Current Report
on Form 8-K and are incorporated herein by reference.