DIFFUSION PHARMACEUTICALS INC. (NASDAQ:DFFN) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01Entry into a Material Definitive Agreement.

On March 31, 2017, Diffusion Pharmaceuticals Inc. (the Company)
conducted the second and final closing (the Final Closing) of the
Companys private placement (the Private Placement). The initial
closing (the Initial Closing) of the Private Placement was
previously reported by the Company on its Current Report on Form
8-K filed with the Securities and Exchange Commission on March
15, 2017 (the Prior 8-K).

In connection with the Final Closing, the Company entered into
Subscription Agreements (the Purchase Agreements) with certain
accredited investors to which the Company sold 4,558,030 shares
of the Companys Series A convertible preferred stock, par value
$0.001 per share (the Preferred Stock), initially convertible
into one share of the Companys common stock, par value $0.001 per
share (the Common Stock), at a purchase price of $2.02 per share.
In addition, each investor received a 5-year warrant (the
Warrants, and collectively with the Preferred Stock, the
Securities) to purchase one share of Common Stock for each share
of Preferred Stock purchased by such investor at an exercise
price equal to $2.22, subject to adjustment thereunder.

The Company received total gross proceeds of approximately
$9,200,000 from the Final Closing, prior to deducting placement
agent fees and estimated expenses payable by the Company
associated with the Final Closing. The Company currently intends
to use the proceeds of the Private Placement to fund research and
development of its lead product candidate, transcrocetinate
sodium, also known as trans sodium crocetinate, or TSC, including
clinical trial activities, and for general corporate purposes.
The Company received aggregate gross proceeds of $25,000,000 from
the Initial Closing and the Final Closing, which is the maximum
offering amount in the Private Placement.

The holders of shares of Preferred Stock issued at the Final
Closing will be entitled to vote with the holders of the Common
Stock and shall be entitled to that number of votes equal to the
whole number of shares of Common Stock into which the aggregate
number of shares of Preferred Stock held of record by such holder
are convertible as of the close of business on the record date
fixed for such vote or such written consent based on a conversion
price, solely for such purpose, equal to $3.99, the closing price
of our Common Stock on the date of the Final Closing. The other
rights, preferences and privileges of the Preferred Stock issued
at the Final Closing are identical to the rights, preferences and
privileges of the Preferred Stock issued at the Initial Closing,
which are set forth in a Certificate of Designation of
Preferences, Rights and Limitations of the Series A Convertible
Preferred Stock of Diffusion Pharmaceuticals Inc. (the
Certificate of Designation) and summarized in the Prior 8-K. A
description of the Warrants is also summarized in the Prior 8-K.

The Securities were offered and sold in a private placement to
exemptions from the registration requirements of the Securities
Act of 1933, as amended (the Securities Act), afforded by Section
4(a)(2) and Rule 506 of Regulation D promulgated thereunder. To
the extent that any shares of Common Stock are issued in
connection with the conversion of the Preferred Stock or the
exercise of the Warrants, the Common Stock may not be offered,
transferred or sold in the United States absent registration or
the availability of an applicable exemption from the registration
requirements of the Securities Act.

In connection with the Final Closing, the Companys placement
agent, to the Placement Agency Agreement dated January 27, 2017
(as amended, the Placement Agency Agreement and, together with
the Purchase Agreements and the Warrants, the Transaction
Documents), received a cash fee of approximately $888,000, plus a
Placement Agent Warrant to purchase 439,807 shares of Common
Stock at an exercise price equal to $2.22. All of the Transaction
Documents were previously reported in the Prior 8-K.

The Company also intends to offer registration rights to each
investor that purchased our Preferred Stock to which the Company
will be required to file a registration statement to register the
Common Stock issuable upon the conversion or exercise of the
Securities, subject to certain limitations and the terms
contained therein.

The foregoing summaries of the material terms of the Transaction
Documents and the Certificate of Designation are not complete and
are qualified in their entirety by reference to the full text
thereof and the Prior 8-K, copies of each of which are
incorporated by reference herein.

Item 3.02.Unregistered Sales of Equity
Securities.

The information set forth in Item 1.01. Entry into a Material
Definitive Agreement is incorporated by reference herein in its
entirety.

Item 7.01.Regulation FD
Disclosure.

On April 3, 2017, the Company issued a press release announcing
the Final Closing. A copy of the press release is attached as
Exhibit 99.1 to this Current Report on Form 8-K, and the
information contained therein is incorporated herein by
reference.

to the rules and regulations of the Commission, the information
in this Item7.01 disclosure, including Exhibit 99.1 and
information set forth therein, is deemed to have been furnished
and shall not be deemed to be filed under the Exchange Act.

Additional Information

This announcement is neither an offer to sell, nor a solicitation
of an offer to buy, any securities and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful. The securities described
herein have not been and will not be registered under the
Securities Act, or any state securities laws, and unless so
registered, may not be offered or sold in the United States
except to an exemption from the registration requirements of the
Securities Act, and applicable state securities laws.

Item 9.01.Financial Statements and Exhibits

(d)Exhibits.

About DIFFUSION PHARMACEUTICALS INC. (NASDAQ:DFFN)

Diffusion Pharmaceuticals Inc., formerly RestorGenex Corporation, is a clinical-stage biotechnology company. The Company is focused on developing standard-of-care treatments, including radiation therapy and chemotherapy. The Company’s lead product candidate, transcrocetinate sodium, also known as trans sodium crocetinate (TSC) is used in various cancer types, in which tumor oxygen deprivation (hypoxia) is known to diminish the effectiveness of treatments. The Company’s Diffusion’s technology is targeted at overcoming treatment-resistance in solid cancerous tumors by combining its lead product candidate, TSC, with standard-of-care radiation and chemotherapy regimens, thus effecting a better patient survival outcome without the addition of harmful side effects. Its clinical development plan targets TSC at the radiation and chemotherapy sensitization of hypoxic tumor types, with an initial focus on primary brain cancer (glioblastoma or GBM), pancreatic cancer, and brain metastases.

DIFFUSION PHARMACEUTICALS INC. (NASDAQ:DFFN) Recent Trading Information

DIFFUSION PHARMACEUTICALS INC. (NASDAQ:DFFN) closed its last trading session 00.00 at 3.99 with 152 shares trading hands.