Item 1.01 Conclusion of a Material Definitive Agreement.

At November 18, 2021, Panacea Life Sciences Holdings, Inc. (the “Company”) has entered into a securities purchase agreement (the “Purchase Agreement”) with
Lincoln Park Capital Fund, LLC (the “Buyer”) whereby the Company has agreed to sell a 10% discount senior convertible promissory note in the principal amount of $ 1,100,000 (the “Note”) and five-year warrants to purchase 785,715 ordinary shares of the Company, par value $ 0.0001 per share at an exercise price of $ 1.40 per share (the “Warrants”) in accordance with the terms and conditions of the SPA for a total purchase price of $ 1,000,000. Closing is subject to customary closing conditions and the establishment of an escrow agreement with the bank and delivery of the purchase price to the bank, and is expected to occur within the next three business days from the date. of this current report on form 8- K.

Note will be due November 18, 2022, i.e. one year from the date of issue. The note initially bears no interest, but at the time and during the failure of the Company to file all required reports and other documents with the
Security and Trade Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) by december 2021, the note will bear interest at the rate of 12% per annum. In addition, in the event of default by the Company and during any event of default, the note will bear interest at the rate of 18% per annum. Events of default include failure to file all required reports and other documents with the SECOND in accordance with the law on exchange by January 2022, suspension of trading or listing of the Company’s ordinary shares on the OTCQB or on a national stock exchange, and failure to reserve a sufficient number of shares for the conversion or exercise of all securities sold as part of the SPA. In addition, in the event of default, the Holder will have the right to cause the Company to repay the outstanding principal and interest accrued on the Note at a premium of 125%.

Principal and accrued interest on the note is convertible into ordinary shares at a conversion price of $ 1.40 per share, subject to certain adjustments summarized as follows: (i) if an event of default has occurred before the maturity date, a reduction to 80% of the conversion price then in effect, (iii) anti-dilution adjustment upon certain issues of common stock or derivative securities at a price per share below the conversion price, (iii) customary adjustments for stock splits, stock dividends and similar corporate events, and (iv ) the adjustment during a public offer by the Company meeting certain criteria, as summarized below.

Pursuant to the Note, upon a public offering by the Company of ordinary shares, alone or in units or with other securities in accordance with an effective registration statement resulting in gross proceeds for the Company of at least $ 10,000,000, and in connection with which the ordinary share is approved for listing on a national stock exchange (a “Qualifying Offer”), the conversion price will be reduced to 90% of the offering price per share in the Qualified Offer, if this price is lower than the conversion price then in effect. In addition, immediately prior to a qualifying bid, the Company may reimburse all or part of the principal outstanding and interest accrued on the note at a premium of 115%.

The note also contains customary restrictive covenants prohibiting the Company from taking certain actions while the note remains in circulation.

The warrants may be exercised for a period of five years from May 18, 2022, at an exercise price of $ 1.40 per share, subject to certain adjustments which are substantially similar to those contained in the note, including the adjustment of the qualified offer.

2

Each of the Notes and Warrants contains a limitation on beneficial ownership of 4.99% under which neither may be converted or exercised, as the case may be, if and to the extent that, following this conversion or exercise, the holder would effectively hold more than 4.99% of the Company’s shares outstanding ordinary shares, which may be increased to 9.99% upon 61 days written notice by the holder.

The SPA provides that the Purchaser may purchase an Additional Note and Additional Warrants on substantially the same terms as the Note and Warrants on any Business Day prior to the 91st Business Day immediately following the closing of the SPA.

Under the SPA, the Company has entered into a registration rights agreement dated November 18, 2021, by and between the Company and the Purchaser, in which the Company has agreed to file a registration statement on Form S-1 with the SECOND
at the request of the Purchaser at any time after the 180 day period following the initial closing.

The foregoing description of the terms of the Note, Warrants, SPA and Registration Rights Agreement, and the transactions contemplated by it, does not purport to be complete and is qualified in its entirety by reference to SPA form, note form, warrant form and registration rights agreement form, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, of this current report on Form 8-K and are incorporated herein by reference.

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

The information contained above in Item 1.01 is hereby incorporated by reference into this Item 2.03.

Article 3.02 Unregistered sale of Equity securities.

The information contained above in Section 1.01 is hereby incorporated by reference into this Section 3.02.

The offer and sale of the Note and Warrants under the SPA have not been or will not be registered under the Securities Act of 1933 and are exempt from registration in accordance with section 4 (a) (2 ) thereof and promulgated Rule 506 (b). below.

Item 9.01 Financial statements and supporting documents

(d) Exhibits.



                                                                                      Filed or
Exhibit                                              Incorporated by Reference        Furnished
   #               Exhibit Description             Form       Date        Number      Herewith
 10.1       Form of Securities Purchase                                                 Filed
          Agreement*
 10.2       Form of Original Issue Discount                                             Filed
          Senior Convertible Promissory Note
 10.3       Form of Warrant                                                             Filed
 10.4       Form of Registration Rights                                                 Filed
          Agreement*
  104     Cover Page Interactive Data File
          (embedded within the Inline XBRL
          document)

* Exhibitions and / or schedules have been omitted. The Company hereby undertakes to provide the SECOND on request any information omitted.

3

© Edgar online, source Previews