OSR Health, Inc. 10-Q

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Pursuant to the terms of an Equity Line of Credit Agreement comprising a Common Stock Purchase Agreement and a Registration Rights Agreement (taken together, the “ELOC Agreement”) as amended May 6, 2025, the Company may elect, in our sole discretion, to issue and sell to by White Lion Capital LLC dba White Lion GBM Innovation Fund (“White Lion”), from time to time, up to $78.9 million worth of shares of Common Stock from after the effective date of a related registration statement until the earlier of December 31, 2026 or the sale of all of such shares to White Lion. Any terms in initial capitals and not otherwise defined herein shall be as defined in the amended Common Stock Purchase Agreement and/or the Registration Rights Agreement. Pursuant to the Common Stock Purchase Agreement, following the effective date of this resale registration statement registering the shares issuable to White Lion in accordance with the terms of the Registration Rights Agreement, the Company has the right, but not the obligation, to require White Lion to purchase, from time to time, up to the lesser of (i) $78,900,000 in aggregate gross purchase price of newly issued shares of Common Stock, par value $0.0001 per share and (ii) 3,853,467 shares of Common Stock (the “Exchange Cap”), in each case, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. 34 The number of shares of Common Stock that the Company may require White Lion to purchase in any single sales notice will depend on a number of factors, including the relevant calculated purchase price and type of purchase notice that the Company delivers to White Lion. For example: (1) if the Company were to deliver a Rapid Purchase Notice, the Company can require White Lion to purchase a number of shares equal to $2,000,000 divided by the average of the three (3) lowest traded prices of the Common Stock on the Rapid Purchase Notice Date; and (2) if the Company were to deliver a VWAP Purchase Notice, the Company can require White Lion to purchase a number of shares equal to $2,000,000 divided by the product of (i) the lowest daily VWAP of the Common Stock during the VWAP Purchase Valuation Period and (ii) ninety-seven percent (97%). White Lion’s purchase obligations under a single Rapid Purchase Notice or a single VWAP Purchase Notice shall not exceed $2,000,000, and the maximum amount of shares of Common Stock the Company may require White Lion to purchase under a single VWAP Purchase Notice shall be the lesser of (A) 30% of the Average Daily Trading Volume or (B) $2,000,000 divided by the highest closing price of the Common Stock over the most recent five (5) Business Days immediately preceding White Lion’s receipt of the subject VWAP Purchase Notice. Additionally, in consideration for White Lion’s commitments under the Common Stock Purchase Agreement, the Company agreed to issue to White Lion the number of shares of Common Stock equal to $800,000 divided by the closing price of the Common Stock on the day that is the earlier of (i) the business day prior to effectiveness of this resale registration statement registering the shares issuable under the Common Stock Purchase Agreement and (ii) the business day prior to the date that White Lion requests the issuance of such shares (such shares, the “Commitment Shares”). Accordingly, the actual number of shares of our Common Stock issuable will vary depending on the then-current market price of shares of Common Stock sold to White Lion under the ELOC Agreement, but will not exceed the number set forth in the preceding paragraphs unless we file an additional registration statement under the Securities Act of 1933, as amended (the “Securities Act”), with the U.S. Securities and Exchange Commission (the “SEC”). See “Prospectus Summary—Post IPO Financing—Equity Line of Credit Agreement” and “ELOC Financing” for a description of the ELOC Agreement and “Selling Stockholder” for additional information regarding White Lion. Warrants Pursuant and subject to the terms of the ELOC Agreement and as further subject to the terms of a Common Stock Purchase Warrant dated May 6, 2025 between the Company and White Lion (“Warrant”), White Lion has the right, but not the obligation, at any time for a period of five years following the Warrant’s execution date, to subscribe for and purchase from the Company up to $4,000,000 worth, or the Available Share Amount (as defined in the Warrant and subject to adjustment thereunder), of Common Stock (the “Warrant Shares”). The initial purchase price of one share of Common Stock under the Warrant shall be equal to the Exercise Price, which shall be $1.584 or as otherwise defined therein pursuant to any applicable adjustments to the same. Convertible Note Pursuant and subject to the terms of a Convertible Note Purchase Agreement and executed on May 6, 2025 between the Company and White Lion (the “Note Purchase Agreement”) and related convertible promissory notes (“Convertible Notes”), White Lion has agreed to loan the Company the principal amount of $1,110,000 at an interest rate of 5% per annum subject to two Convertible Notes maturing on the date occurring Nine (9) months after the closing date of each respective loan. The first Convertible Note in the principal amount of $445,000 shall close on or before one day after the filing of a related registration statement. The second Convertible Note in the principal amount of $665,000 shall close one day after the applicable registration statement becomes effective. The Company has agreed to allocate 10% of the proceeds from each purchase notice under the ELOC and/or warrant exercise toward the repayment of the outstanding Convertible Note(s). At any time, White Lion may convert one or both Convertible Notes at 95% multiplied by the lowest Volume Weighted Average Price (“VWAP”) fifteen days prior to the conversion notice. The Company and the Investor have agreed that no more than 4.99% of the shares outstanding will be issued to White Lion, which can be adjusted to up to 9.99% upon 61 prior days’ notice from White Lion. 35 Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Mine Safety Disclosures Not applicable.