Item
1.01 Entry into a Material Definitive Agreement.
On
February 5, 2020, Adhera Therapeutics, Inc. (the “Company”) entered into a Securities Purchase Agreement with the
investor parties thereto (collectively, the “Investors”) pursuant to which the Investors agreed to purchase: (i) original
issue discount unsecured Convertible Promissory Notes (the “Notes”), issued at a 10% original issue discount, for
a total purchase price of $499,950, and (ii) warrants to purchase up to such number of shares of the common stock of the Company
(“Common Stock”) as is equal to the product obtained by multiplying 1.75 by the quotient obtained by dividing (A)
the principal amount of the Notes by (B) the then applicable conversion price of the Notes (the “Warrants”; and the
foregoing offering of securities being referred to as the “Offering”).
The
Company, which terminated its business operations and associated personnel in December 2019 as described in the Current Report
on Form 8-K that the Company filed with the Securities and Exchange Commission on December 17, 2019, intends to use the proceeds
of the Offering to continue its efforts to restructure the Company and to identify potential strategic transactions to enhance
the value of the Company and its assets as such opportunities arise.
Pursuant
to the Notes, the Company promises to pay the principal sum of the Notes to the respective Investor, or its permitted assigns
(the “Holder”), on the date that is the six (6) month anniversary of the original issue date, or August 5, 2020 (the
“Maturity Date”), or such earlier date as the Note is required or permitted to be repaid as provided thereunder, and
to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of the Note in accordance with
the provisions thereof. Interest shall accrue to the Holders on the aggregate unconverted and then outstanding principal amount
of the Notes at the rate of 10% per annum, calculated on the basis of a 360-day year and shall accrue daily commencing on the
original issue date until payment in full of the outstanding principal (or conversion to the extent applicable), together with
all accrued and unpaid interest, liquidated damages and other amounts which may become due thereunder, has been made.
On
or after May 5, 2020 until the Notes are no longer outstanding, the Notes shall be convertible, in whole or in part, at any time,
and from time to time, into shares of Common Stock at the option of the noteholder. The conversion price shall be the lower of:
(i) $0.50 per share of Common Stock and (ii) 70% of the volume weighted average price of the Common Stock on the trading market
on which the Common Stock is then listed or quoted for trading for the prior ten (10) trading days (as adjusted for stock splits,
stock combinations and similar events); provided, that if the Notes are not prepaid on or before May 5, 2020, then the conversion
price shall be the lower of (x) 60% of the conversion price as calculated above or (y) $0.05 (as adjusted for stock splits, stock
combinations and similar events). The conversion price of the Notes shall also be adjusted as a result of subsequent equity sales
by the Company, with customary exceptions.
The
exercise price of the Warrants shall be equal to the conversion price of the Notes, provided, that on the date that the Notes
are no longer outstanding, the exercise price shall be fixed at the conversion price of the Notes on such date, with the exercise
price of the Warrants thereafter (and the number of shares of Common Stock issuable upon the exercise thereof) being subject to
adjustment as set forth in the Warrants.
Maxim
Group LLC (“Maxim”) served as placement agent in connection with the Offering. The Company intends to pay a placement
fee to Maxim equal to 10% of the aggregate gross proceeds raised in the Offering.
Copies
of the Securities Purchase Agreement, the form of Note and the form of Warrant in connection with the Offering are attached hereto
as Exhibits 10.1, 4.1 and 4.2, respectively, and are incorporated herein by reference.