Business Context and Reporting Period
Company: PharmaCyte Biotech, Inc. (PMCB)
Filing Type: Form 8-K (Current Report)
Date of Report: August 17, 2025
Event: Entry into a Material Definitive Agreement for a private placement of securities.
Key Financial Metrics and Transaction Details
- Gross Proceeds: Expected $7,000,000.
- Securities Issued:
- 7,000 shares of Series C Convertible Preferred Stock (Stated value: $1,000/share).
- Warrants to purchase up to 7,000,000 shares of Common Stock.
- Conversion Terms: Preferred Stock initially convertible into up to 7,000,000 shares of Common Stock at $1.00/share.
- Warrant Terms: Exercise price of $1.00/share; 5-year term; subject to full ratchet anti-dilution.
- Dividends: 7% per annum compounded quarterly (payable in cash); increases to 15% per annum upon a "Triggering Event."
- Placement Agent Fees: 8.0% cash fee of gross proceeds plus $10,000 non-accountable expense; 8.0% warrant fee based on conversion shares.
- Use of Proceeds: General corporate purposes and working capital.
Material Changes and Agreements
The Company entered into a Securities Purchase Agreement with accredited investors. The transaction is exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. Closing is expected on August 19, 2025.
Registration Rights: The Company must file a resale registration statement covering 150% of the Conversion Shares and 150% of the Warrant Shares within 30 days of the agreement's effective date. Failure to do so triggers liquidated damages.
Stockholder Approval: The Company must seek stockholder approval for the issuance of shares exceeding 19.99% of outstanding Common Stock by October 31, 2025, to comply with Nasdaq listing standards.
Outlook, Risks, and Contingencies
- Triggering Events: Defined events (e.g., failure to file registration statements, failure to pay dividends) allow holders to redeem Preferred Stock for cash at a premium and increase the dividend rate to 15%.
- Anti-Dilution: Both the conversion price and warrant exercise price are subject to "full ratchet" adjustments if the Company issues equity at a price below $1.00.
- Covenants: The agreement includes affirmative and negative covenants restricting indebtedness, acquisitions, liens, and asset transfers.
- Liquidity: No established public trading market exists for the Preferred Stock or Warrants.
Investor Verification Checklist
- Verify the closing date (expected August 19, 2025) and confirmation of the $7 million gross proceeds.
- Review the "Certificate of Designations" (Exhibit 3.1) for specific definitions of "Triggering Events" and redemption premiums.
- Confirm the timeline for the required stockholder meeting (by October 31, 2025) to approve the issuance of shares beyond the 19.99% Nasdaq limit.
- Assess the impact of the "full ratchet" anti-dilution provisions on future capital raising capabilities.
- Monitor the filing of the resale registration statement within the 30-day window to avoid liquidated damages.