Kiromic BioPharma Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Unregistered Sales of Equity Securities, Financial Statements and Exhibits
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On July 3, 2024, Kiromic BioPharma, Inc. (the “Company”) issued a 25% Senior Secured Convertible Promissory Note (the “Senior Secured Note”) and a First Amendment to the Senior Secured Note (the “First Amendment”, and the Senior Secured Note as amended, the “Note”) to an accredited investor (the “Investor”). The Note has a principal amount of $2,000,000, bears interest at a rate of 25% per annum (the “Stated Rate”) and matures on July 3, 2025 (the “Maturity Date”), on which the principal balance and accrued but unpaid interest under the Note shall be due and payable. The holder of the Note shall have the right at its option, at any time beginning on September 30, 2024, to convert the Note into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a conversion price equal to 90% of the 5-day VWAP (as defined in the Note) for the Common Stock beginning on the fifth day preceding the date of the Notice of Conversion (as defined in the Note), subject to a beneficial ownership limitation equivalent to 19.99%. The Stated Rate will increase to 27% per annum or the highest rate then allowed under applicable law (whichever is lower) upon occurrence of an event of default, including the failure by the Company to make payment of principal or interest due under the Note on the Maturity Date, and any commencement by the Company of a case under any applicable bankruptcy or insolvency laws.
The unpaid principal of and interest on the Note constitute unsubordinated obligations of the Company and are senior and preferred in right of payment to all subordinated indebtedness and equity securities of the Company outstanding as of the Issuance Date; provided, however, that the Company may incur or guarantee additional indebtedness after the Issuance Date, whether such indebtedness are senior, pari passu or junior to the obligations under the Note, which are secured by all of the Company’s right, title and interest, in and to, (i) all fixtures (as defined in the Uniform Commercial Code, the “UCC”) and equipment (as defined in the UCC), and (ii) all of the Company’s intellectual property as specified in the Note, subject to certain exclusions as described in the Note.
The foregoing description of the Senior Secured Note and the First Amendment are qualified in their entirety by reference to the full text of such Note and First Amendment, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.
Following the transaction described in this Item 1.01, the Holder holds (i) six promissory notes, two promissory notes of outstanding principal of $2.4 million each, three promissory notes of outstanding principal of $2.0 million each, for an aggregate value of $10.8 million that remain issued and outstanding, and the Note, (ii) 14,000 shares of the Company’s Series C Convertible Voting Preferred Stock and (iii) 16,837.58 shares of the Company’s Series D Convertible Voting Preferred Stock.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities |
Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference. The issuance of the Note was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| 10.1 | 25% Senior Secured Convertible Promissory Note |
| 10.2 | First Amendment to 25% Senior Secured Convertible Promissory Note |
| 104 | Cover Page Interactive Data File (embedded within the XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Kiromic BioPharma, Inc. | ||
| Date: July 10, 2024 | By: | /s/ Pietro Bersani |
| Pietro Bersani | ||
| Chief Executive Officer | ||
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