Sun BioPharma, Inc. (OTCMKTS:SNBP) Files An 8-K Entry into a Material Definitive Agreement

Sun BioPharma, Inc. (OTCMKTS:SNBP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.

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Entry into a Material Definitive Agreement.

In closings on December 31, 2018 and January 14, 2019, Sun BioPharma, Inc. (the “Company”) entered into additional Securities Purchase Agreements (together with the previously announced Securities Purchase Agreement dated December21, 2018, the “Purchase Agreements”) with certain investors (the “Investors”) and issued approximately $659,000 original principal amount of unsecured convertible promissory notes (the “Notes”) and warrants to purchase up to 376,360 shares of common stock (the “Warrants”). The Company expects to use the net proceeds from the issuance of the additional Notes and Warrants for working capital and general corporate purposes.

As previously announced, amounts borrowed under the Notes are scheduled to mature on June 30, 2019 and will bear an interest rate of 10.0% per annum. All amounts due under the Notes will automatically convert into shares of common stock of the Company based on an initial conversion price of $3.50 per share upon maturity or, if earlier, date the Company receives gross proceeds of at least $6 million from the sale of equity securities (excluding proceeds received in connection with the Purchase Agreements). Upon the occurrence of certain events of default, the Notes require the Company to repay the unpaid principal amount of the Notes and any unpaid accrued interest. The Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $4.50. The conversion price of the Notes and the exercise price of the Warrants are each subject to adjustments prior to conversion or exercise (i) upon customary events affecting all outstanding shares of Common Stock and (ii) upon with the issuance by the Company of convertible or derivative equity-based instruments with a lower conversion or exercise price, on or before June 30, 2019.

to the Purchase Agreements, the Company has agreed to prepare and file a registration statement with the Securities and Exchange Commission (“SEC”) upon request by the holders of at least 75% of the then outstanding Registrable Securities prior to the earlier of (a) the date on which all Registrable Securities (as defined in the Purchase Agreement) may be sold without registration and without restriction or in accordance with Rule 144 in a single transaction and (b) December 21, 2021. The Company has also agreed, among other things, to indemnify the Investors for certain liabilities resulting from any such registration and to pay all fees and expenses incident to the Company’s obligations under the Purchase Agreements.

The foregoing descriptions of the Purchase Agreements, Notes, and Warrants are qualified by reference to the full text of the Form of Purchase Agreement, the Form of Note, and the Form of Warrant, which were filed as Exhibits 10.1, 10.2, and 10.3, respectively, to the Company’s current report on Form 8-K filed December 26, 2018 and are incorporated herein by reference.

Item 3.02.

Unregistered Sales of Equity Securities.

The disclosure regarding the issuance and terms of conversion or exercise of the Notes and Warrants in Item 1.01 above is incorporated into this Item by reference. Through closings under the Purchase Agreements through January 14, 2019, the Company has received a total of approximately $1.55 million in gross cash proceeds in connection with the sale of Notes and Warrants. As of the date of this report, conversion of the Notes in accordance with their terms would result in the issuance of 438,182 shares of our common stock and exercise of the Warrants would result in the issuance of up to 876,364 shares of common stock for a total exercise price of approximately $3.9 million.

The Notes and Warrants were issued in reliance on an exemption from registration set forth in Section4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) to a limited number of persons who were “accredited investors” or “sophisticated investors,” as those terms are defined in Rule 501 of Regulation D of the SEC, without the use of any general solicitations or advertising to market or otherwise offer the securities for sale.

None of the Notes, Warrants or shares of common stock issued or issuable in the transactions described in this Item 3.02 have been registered under the Securities Act or applicable state securities laws and none may be offered or sold in the United States absent registration under the Securities Act, or an exemption from such registration requirements. Neither this current report on Form 8-K nor any exhibit attached hereto shall constitute an offer to sell or the solicitation of an offer to buy the Notes, Warrants or any other securities of the Company.

Item 9.01Financial Statement and Exhibits.

(d)Exhibits

About Sun BioPharma, Inc. (OTCMKTS:SNBP)

Sun BioPharma, Inc., formerly Cimarron Medical, Inc., is a clinical stage drug development company. The Company is a biopharmaceutical company focused on developing therapies for pancreatic diseases. It is engaged in the commercial development of a polyamine analogue for pancreatic cancer and for a second indication in chronic pancreatitis. The Company’s products include SBP-101, SBP-102 and SBP-103. Its SBP-101 is a polyamine compound and exhibits specificity for the exocrine pancreas, with therapeutic potential for both pancreatic cancer and pancreatitis indications. It develops SBP-101 for the treatment of patients with pancreatic ductal adenocarcinoma. The SBP-102 product is in non-clinical feasibility evaluation for the treatment of patients with pancreatitis. The SBP-103 product is in non-clinical exploratory evaluation. The Company has enrolled first patient in its Phase I clinical trial of SBP-101 in patients with previously treated pancreatic cancer.

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