STATERA BIOPHARMA, INC. such as entering into a material definitive agreement, creating a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant, unrecorded sale of equity securities, FD settlement disclosure, financial statements and parts (Form 8-K)

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Section 1.01 Entering into a Material Definitive Agreement

On October 18, 2022, Statera Biopharma, Inc.a Delaware company (the “Company”) has entered into the promissory note assignment (the “partial assignment”) with Avenue Venture Opportunities Fund, LP (“Venture Avenue”) and
Silverback Capital Corporation (“Silverback”), whereby, in return for a cash payment of $400,000 by Silverback to Avenue Venture, Avenue Venture awarded Silverback a $400,000 part (the “assigned part”) of this promissory note in the aggregate principal amount of
$15 million issued by the Company to Avenue Venture, dated April 26, 2021
(the “Original Note”), pursuant to the Loan and Security Agreement, dated on the even date of the Original Note, by and between the Company and Avenue Venture, as supplemented and amended (the “Loan Agreement”). Copies of the Loan Agreement and Supplement to Loan and Security Agreement (the “Supplement”) are attached as Exhibits 10.1 and 10.2 to the company’s current report on Form 8-K filed with the Security and Exchange Commission (the “SEC”) on August 2, 2021. A copy of the Forbearance and Second Amendment to the Loan Documents (“Forbearance Agreement”) regarding the Loan Agreement is attached as Exhibit 1.1 to the Company’s current report on Form 8-K filed with the SECOND on
May 27, 2022.

Pursuant to the partial sale, the Company issued an amended and restated convertible bond due May 1, 2024 (the “A&R Note”) for a principal amount of
$400,000.00 in Silverback from October 18, 2022 (the “Issue Date”). The A&R bears interest at a variable annual rate of interest equal to the sum of (i) the greater of (A) the Prime Rate (as defined in the Supplement) and (B) 3.25% plus (ii ) 7.74%. Payment of the full principal amount of the outstanding A&R Note, together with all accrued interest thereon, will be made on May 1, 2024 (the due date “). In addition, Silverback has the right to convert, at any time up to the date of maturity, all or part of the unpaid principal amount, accrued interest and fees due and payable thereon into common shares of the Company ( the “Conversion Shares”) at a conversion price equal to 75% of the lowest price of the common stock of the Company during the five trading days preceding the date of conversion, including the date of conversion.

Silverback’s aforementioned conversion right is subject to certain limitations set forth in the A&R Note, including, among other things, that (i) Silverback may not convert an amount which would be convertible into such number of conversion shares which would exceed the difference between the number of common shares beneficially owned by Silverback and its affiliates and 4.99% of the outstanding common shares of the Company, and (ii) so long as the rules of the Nasdaq Stock Exchange so require, the sum of the number of common shares of the Company issuable pursuant to the A&R rating will be limited to 19.99% of the common shares issued and outstanding immediately prior to the date of issue, unless the shareholder approval is obtained.

The foregoing descriptions of the terms of the A&R Note and Partial Assignment do not purport to be complete and are qualified in their entirety by reference to the full text of the A&R Note and Partial Assignment attached as Schedules 4.1 and 10.1 hereto. current report. on Form 8-K, the exhibits of which are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information contained above in Section 1.01 is incorporated by reference into this Section 2.03 in its entirety.

Item 3.02 Unrecorded Sales of Equity securities.

The disclosure set forth above in Section 1.01 of this Current Report on Form 8-K with respect to the A&R Rating is incorporated herein by reference. The Conversion Shares to be issued under the A&R Note will not be registered under the Securities Act under the exemption from registration provided by Section 4(a)(2) of the Securities Act. securities and Rule 506(c) promulgated thereunder.

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Section 7.01 Disclosure of FD Rules.

On October 24, 2022, the Company issued a press release announcing the Partial Sale. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information in this Section 7.01, including Exhibit 99.1, is furnished and not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act “), or otherwise subject to liabilities under this section, and shall not be deemed to be incorporated by reference in any documents filed by the Company under securities law or the Exchange Act, regardless the general language of incorporation into these documents. This current report shall not be taken as an admission as to the materiality of any information contained in this Section 7.01, including Exhibit 99.1.

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Item 9.01 Financial statements and supporting documents.

(d) Exhibit

Exhibit No.                Description
    4.1         Assignment of Promissory Note,
              dated October 18, 2022, by and among
              Avenue Venture Opportunities Fund,
              L.P., Silverback Capital Corporation
              and Statera Biopharma, Inc.
   10.1         Amended and Restated Convertible
              Note Due May 1, 2024, dated as of
              October 18, 2022
   99.1         Press Release of Statera Biopharma,
              Inc, dated as of October 21, 2022
    104       Cover Page Interactive Data File
              (embedded with the inline XBRL
              document)

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