Item 1.01. Entry into a Material Definitive
Agreement.
On
January 24, 2017 FluoroPharma Medical, Inc. (the
“Company”) accepted subscriptions pursuant to a Note
Purchase Agreement (the “Purchase Agreement”) entered
into with certain accredited investors identified therein for the
issuance and sale in a private placement (the “Private
Placement”) of an aggregate principal amount of up to
$1,000,000 of senior secured convertible promissory notes (the
“Notes”), convertible into shares of common stock at a
conversion price per share equal to the per security price of the
securities sold in the Subsequent Financing (such price, or such
price as last adjusted) (the “Conversion Price”). The
initial closing of the Private Placement was consummated on January
24, 2017 for an aggregate amount of $5,000. The Company
may conduct any number of additional closings so long as the final
closing occurs on or before the 240th day following the initial
closing date
The
Notes mature one year from the date of issuance and bear interest
at the rate of 12% per annum.
The
Notes shall be secured with an “all assets” security
agreement.
The
Holder shall have the right, at its option at any time after or
simultaneous with a subsequent financing, to convert the principal
amount of this Note plus any accrued interest into such number of
fully paid and nonassessable whole shares of Common Stock (the
“
Conversion
Shares
”) as is obtained
by dividing (i) the Outstanding Balance to be converted, multiplied
by 1.25, by (ii) the per security price of the securities sold in
the Subsequent Financing (such price, or such price as last
adjusted, being referred to herein as the
“
Conversion
Price
.) Any voluntary
conversions made by the Holder under this Note shall not in any way
affect the rights of the Holder to the Additional Warrant.The Notes
may be prepaid at any time without penalty or
premium.
The Notes contain the following event of default
provisions:
●
the
failure to pay principal within ten business days after such
amounts are due;
●
the
Company breaches any material covenant or other term or condition
of the Notes, the Purchase Agreement or other transaction document,
except for a breach of payment, in any material respect and such
breach, if subject to cure, continues for a period of twenty days
after written notice to the Company from the investor;
●
the
Company is advised by written notice from the investor that a
material representation or warranty of the Company made in the
Notes or Purchase Agreement was false or misleading in any material
respect;
●
any
dissolution, liquidation or winding up by the Company or a
subsidiary of a substantial portion of their business;
●
any
cessation of operations by the Company or a
subsidiary;
●
the
failure by the Company or any subsidiary to maintain any material
intellectual property rights, personal, real property, equipment,
leases or other assets which are necessary to conduct its business
(whether now or in the future) and such breach is not cured with
thirty days after written notice to such effect;
●
any
money judgment shall be entered or made in a non-appealable
adjudication against the Company or any subsidiary or any of their
properties or other assets for more than $250,000 in excess of the
Company’s insurance coverage, unless stayed vacated or
satisfied within 60 days;
●
the
Company files any petition or action for relief under any
bankruptcy or makes any assignment for the benefit of creditors;
or
●
an
involuntary petition is filed against the Company under any
bankruptcy statute now or hereafter in effect, and such petition is
not dismissed or discharged within 60 days.
Upon the closing of a Subsequent Financing, each of the investors
shall be issued, in addition to any warrants issued in connection
with a Subsequent Financing, an additional warrant (the
“Additional Warrant”), to purchase a number of shares
of common stock equal to one hundred percent (100%) of the number
of shares of common stock purchased by such investor in the
Subsequent Financing assuming a per share purchase price of the
securities to be issued in the Subsequent Financing. The terms of
the Additional Warrants shall be substantially identical to the
terms of the warrants issued in the Subsequent Financing, except
the exercise price per share of the Additional Warrants shall be
equal to the per share purchase price of the securities issued in
the Subsequent Financing. In the event no warrants are issued in
the Subsequent Financing, each of the investors shall nonetheless
be entitled to an Additional Warrant, which Additional Warrant
shall be non-callable, exercised on a cash only basis and have a
term of five (5) years following the closing date of the Subsequent
Financing.
In
January, February and March 2017, the Company issued promissory
secured notes for an additional aggregate amount of
$115,000.
The
Company entered into a registration rights agreement (the
“Registration Rights Agreement”) with the investors, in
which the Company agreed to file a registration statement (the
“Registration Statement”) with the SEC to register for
resale the shares of Common Stock issuable upon voluntary
conversion of the Notes within 120 calendar days of the final
closing date of the Private Placement (the “Filing
Date”), and to have the Registration Statement declared
effective within 120 calendar days after the Filing
Date.
On July
22, 2014, FluoroPharma Medical, Inc. (the “Company”)
commenced subscriptions pursuant to a Note Purchase Agreement (the
“2014 Purchase Agreement”) entered into with certain
accredited investors identified therein for the issuance and sale
in a private placement (the “2014 Private Placement”)
of an aggregate principal amount of approximately $2,000,000
represented by one-year promissory notes (the “2014
Notes”). In May 2015, the 2014 Notes were amended to (i)
extend the maturity date an additional six months, and (ii) change
the automatic conversion feature to provide for an increase in the
principal amount of the 2014 Notes to be converted from 115% to
125%. In January 2016, the 2014 Notes were amended further to (i)
extend the maturity date an additional six months, and (ii) adjust
the interest rate of the 2014 Notes up to 12%, applied
retroactively from the initial issuance date of the 2014 Notes. On
July 22, 2016, the Company entered into a further amendment to the
2014 Notes to extend the maturity date of the Notes for an
additional ninety days. On November 2, 2016, the Company obtained
majority approval to further amend the 2014 Notes to extend the
maturity date of the Notes for additional ninety days, with an
effective date of October 22, 2016. On March 13, 2017, the Company
obtained majority approval to further amend the 2014 Notes to
extend the maturity of the Notes for an additional six months, with
an effective date of January 22, 2017.
The
foregoing description of the 2014 Private Placement and related
transactions does not purport to be complete and is qualified in
its entirety by reference to the complete text of the (i) Form of
Purchase Agreement dated July 22, 2014 filed as Exhibit 10.1
hereto; (ii) Form of 2014 Note dated July 22, 2014 issued in the
Private Placement filed as Exhibit 4.1 hereto, (iii) Form of
Amendment No. 3 to the 2014 Notes dated July 22, 2016 filed as
Exhibit 4.2 hereto, and (iv) Form of Amendment No. 4 to the 2014
Notes dated October 22, 2016 filed as Exhibit 4.3 hereto.. For a
more complete description of the initial terms of the 2014 Private
Placement, please see the Company’s Current Report on Form
8-K filed with the Securities and Exchange Commission on July 25,
2014.
In
addition, on March 10, 2017, the Company obtained an amendment,
effective January 31, 2017 to extend the maturity date of the
promissory note entered into on December 22, 2016 to June 30, 2017.
The Company has agreed to amend the interest rate on such
promissory note to 15% and to make monthly interest payments
starting on March 15, 2017.
On
March 14, 2017 the Company obtained an amendment, effective
November 25, 2016 to extend the maturity date of the promissory
note entered into on October 25, 2016 to June 30,
2017.