Item
1.01 Entry into a Material Definitive Agreement.
November
2022 Equity Facility
On
November 3, 2022, Propanc Biopharma, Inc. (the “Company”) entered into a stock purchase agreement (the “Equity Line
Agreement”) with an institutional investor (the “Investor”) providing for an equity financing facility, pursuant to
which Company has the option to request that the Investor commit to purchase up to $5,000,000 of the Company’s shares (the “Shares”)
of common stock, par value $0.001 per share (the “Common Stock”), over a 36-month term commencing on the date on which a
registration statement filed by the Company to register the offer and resale of the Shares by the Investor (the “Registration
Statement”) is declared effective by the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to the Equity
Line Agreement, the Company has the option to exercise this right by providing a notice (a “Drawdown Notice”) from the Company
to the Investor setting forth the number of Shares that the Investor will purchase. The Company has agreed to use the proceeds from such
issuances for the purpose of financing its product prototypes, product production, working capital requirements and general corporate
purposes.
Pursuant
to the Equity Line Agreement, purchases of Shares cannot occur unless and until certain conditions are met, including but not limited
to, the SEC declaring the Registration Statement effective, and the maximum number of Shares that may be purchased pursuant to a Drawdown
Notice cannot exceed the lesser of (i) 200% of the average daily traded value of the Common Stock during the ten (10) business days immediately
preceding a Drawdown Notice, (ii) $250,000 or (iii) an amount that would cause the Investor’s ownership to exceed 4.99% of the
outstanding number of shares of Common Stock immediately prior to the issuance of Shares in connection with the Drawdown Notice, which
limitation can be increased or decreased by the Investor upon 61 days’ prior notice, provided that in no event can such limitation
exceed 9.99% after the issuance of such Shares. The actual amount of proceeds the Company will receive in connection with each Drawdown
Notice is determined under the Equity Line Agreement by multiplying the number of Shares to be sold by the applicable purchase price
per share, which is equal to 80% of the lowest volume weighted average price of the Common Stock during the 10 business days immediately
preceding the Drawdown Notice date (the “Purchase Price”). In addition, subject to certain exceptions in the Equity Line
Agreement, if the Company, at any time during the ten (10)-day period immediately preceding delivery by the Company to the Investor of
a Drawdown Notice, or seven (7) business days following such delivery, issues, sells or grants any Common Stock or Common Stock Equivalents
(as defined in the Equity Line Agreement) at an effective price per share that is lower than the Purchase Price (such lower price, the
“Base Drawdown Price”), then the Purchase Price will be reduced, at the option of the Investor, to a price equal to the Base
Drawdown Price and such adjustment will be reflected by the delivery of additional Shares equal to the difference between the number of Shares that would have been delivered in connection with the initial Drawdown Notice made
at the Purchase Price and the number of Shares that would have been delivered if the initial Drawdown Notice had been made at the Base
Drawdown Price.
Additionally,
in connection with the Equity Line Agreement, the Company and the Investor entered into a registration rights agreement, dated November
3, 2022 (the “Registration Rights Agreement”), pursuant to which the Company agreed to register the maximum number of shares
of Common Stock indicated under the Equity Line Agreement within 45 days of the date of the Registration Rights Agreement.
November
2022 Purchase Agreement
Also
on November 3, 2022, the Company and the Investor entered into a note purchase agreement (the “Purchase Agreement”), pursuant
to which the Company issued the Investor a 10% unsecured convertible promissory note, dated November 3, 2022, with an aggregate face
value of $125,000 (the “Note”), the principal and interest of which is convertible into shares of Common Stock following
an event of default under the Note. The Note was issued with a $25,000 original issue discount and bears interest at a rate of 10% per
annum, with $12,500 in guaranteed interest. The principal and guaranteed interest is due and payable in seven equal monthly payments of $19,642.85, commencing on March 24, 2023 and on the 24th day of each month thereafter until paid in full not later than October 24, 2023, or such earlier
date as the Note is required or permitted to be repaid and to pay such other interest to the Investor on the aggregate unconverted and
then-outstanding principal amount of the Note. The Note also provides that the Company may pre-pay the principal amount and guaranteed
interest at any time without penalty or premium. Additionally, in the event that the Company files with the SEC a qualified offering
statement on Form 1-A and the Note has been outstanding for at least four months, the Investor has the right to convert all or portion
of the Note, including guaranteed interest, into shares of Common Stock at the offering price used in connection with such offering.
In
the event of a default under the Note, the Investor has the option to require the Company repay 120% of the outstanding principal and
accrued and default interest and other amounts due under the Note, or to convert all or a portion of such amounts owed under the Note
into shares of Common Stock (the “Conversion Shares”) (subject to 4.99% and 9.99% beneficial ownership limitations set forth
therein) based on a per share price equal to ninety percent (90%) of the lowest VWAP (as defined in the Note) per share during the twenty
(20) trading-day period prior to such conversion (the “Calculated Conversion Price”), and the Company is required to maintain
a reserve of 400% of the number of Conversion Shares, subject to any increase of such reserved amount by the Investor (the “Reserve
Amount”). In the event that, within 30 calendar days either before or after any conversion, the Company consummates any financing
involving equity, equity equivalents, debt or any combination thereof) or issues any shares of Common Stock or common stock equivalents
at a price less than the most recent Calculated Conversion Price (the “Alternative Conversion Price”), then (i) if no portion
of the Note has been converted, the Calculated Conversion Price would be reduced to the Alternative Conversion Price, and (ii) if some
or all of the Note has been converted, the Company is obligated to issue to the Investor, within two trading days of its request, a number
of shares of Common Stock equal to the difference between the number of shares of Common Stock issued using the Calculated Conversion
Price and the number of shares of Common Stock that would have been issued using the Alternative Conversion Price.
The
Purchase Agreement and Note each contain certain representations and warranties, covenants and indemnities customary for similar transactions
and certain other customary events of default, including, without limitation and with respect to the Note, failure to pay principal or
interest in respect of the Note, failure to deliver Conversion Shares in accordance with the terms of the Note, failure to maintain the
Reserve Amount, failure to keep current with the public reporting requirements required by the rules and regulations of the SEC, and
the occurrence of a Change of Control or Fundamental Transaction (as such terms are defined in the Note) without adequate notice or without
prepaying the Note. In the event of a default, interest accrues at a default interest rate equal to the lesser of (i) 18% per annum or
(ii) the maximum rate permitted by law.
Additionally,
pursuant to the Purchase Agreement and the Note, the Company issued to the Investor, for no additional consideration, an aggregate of
75,000,000 shares of Common Stock (the “Additional Shares”). Pursuant to the Purchase Agreement, without the Investor’s
consent, the Company is not permitted to grant a security interest in the Company’s assets, issue shares of its Common Stock or
other securities based on a price lower than the price of the Common Stock quoted on the Pink® Open Market operated by the OTC Markets
Group Inc. (“OTC Pink”) or file a Form S-8 registration statement.
The
offer and sale of the Shares, the Note, the Conversion Shares and the Additional Shares were, and will be, issued, as applicable, in
reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and/or Regulation D promulgated thereunder. Such offer and sale was, and will be, made, as applicable, only to an “accredited
investor” under Rule 501 of Regulation D promulgated under the Securities Act, and without any form of general solicitation and
with full access to any information requested by such investor regarding the Company or the securities offered and to be issued in connection
with the Equity Line Agreement and the Purchase Agreement, as applicable.
Warrant
Extension Agreement
On
March 8, 2023, the Company entered into a letter agreement (the “Warrant Agreement”) with an institutional investor (the
“Warrant Holder”), pursuant to which the Warrant Holder agreed to exercise up to $250,000 of Series B Warrants Common Stock
Purchase Warrants of the Company (the “Series B Warrants”) as follows: (i) upon the execution of the Warrant Agreement, the
Warrant Holder exercised an aggregate of $150,000 of Series B Warrants for the issuance of 3,750 shares of Common Stock and (ii) within
five (5) business days’ written notice from the Company that the Financial Industry Regulatory Authority, Inc. has approved a reverse stock split of the Common Stock, the Warrant Holder agrees to exercise an additional $100,000 of Series B Warrants
for the issuance of 2,500 shares of Common Stock. In consideration for the agreement to exercise such Series B Warrants (the “Warrant
Exercise”), the Company agreed to extend the termination date of the Series A Common Stock Purchase Warrants and such Series B
Warrants held by the Warrant Holder to March 27, 2025, and to extend the termination date of the Series C Common Stock Purchase Warrants
held by the Warrant Holder to the third anniversary of the last vesting date of such warrant, effective upon the Warrant Holder’s
exercise of the first $150,000 of the Series B Warrants.
The
foregoing descriptions of each of the Equity Line Agreement, Registration Rights Agreement, Purchase Agreement, Note and Warrant Agreement
do not purport to be complete and are qualified in their entirety by reference to the full text of each of the Equity Line Agreement,
Registration Rights Agreement, Purchase Agreement, Note and Warrant Agreement, copies of which are attached to this Current Report on
Form 8-K (this “Report”) as Exhibits 10.1, 10.3, 10.2, 4.1 and 10.4.
