Business Context and Reporting Period
Company: OS Therapies Inc (OSTX)
Filing Type: Form 8-K (Current Report)
Report Date: August 6, 2026 (Event Date: August 10, 2026)
Context: The Company entered into a Securities Purchase Agreement for a private placement of senior secured convertible promissory notes to fund clinical development, regulatory activities, and working capital. The Company is an emerging growth company.
Key Financial Metrics and Transaction Details
Capital Raised (Initial Closing): $5,000,000 (First Tranche of up to $10,000,000 total facility).
Debt Issued: Senior Secured Convertible Promissory Notes with an aggregate principal amount of $5,405,405.42 (reflecting a 7.5% Original Issue Discount).
Equity Issued: 600,000 shares of Common Stock.
Warrants Issued:
- Pre-Funded Warrants: 900,000 shares (Exercise Price: $0.001).
- Standard Warrants: 1,500,000 shares (Exercise Price: $2.85; Maturity: August 10, 2031).
Bridge Note Conversion: A prior $2,200,000 bridge note converted into $2,378,378.38 of Notes, 660,000 Pre-Funded Warrants, and 660,000 Standard Warrants.
Interest Rate: 9.0% per annum, payable monthly. Minimum interest entitlement is one full year regardless of early conversion or prepayment.
Placement Fees: 5.0% cash fee on subscription amount plus $60,000 non-accountable expense fee and reimbursement of expenses up to $25,000.
Material Changes and Transaction Structure
Debt Structure: The financing is structured in two tranches. The First Tranche ($5M) was closed on August 10, 2026. The Second Tranche ($5M) is optional for purchasers.
Security Interest: The Notes are secured by a first-priority security interest in substantially all existing and after-acquired assets of the Company and subsidiaries, excluding intellectual property (though rights to payment from IP sales are included).
Conversion Terms: Notes are convertible at $2.05 per share, subject to a 4.99% beneficial ownership limitation (expandable to 9.99%). Conversion is permitted 90 days after funding.
Prepayment Terms: Voluntary prepayment requires a 110% premium. Mandatory prepayment is required using 100% of VAT refunds and R&D tax credits received by the UK subsidiary.
Guidance, Risks, and Covenants
Use of Proceeds: Clinical development, regulatory activities, working capital, and general corporate purposes.
Registration Rights: The Company must file a registration statement within 30 days and use commercially reasonable efforts to have it declared effective within 120 days for the resale of shares and securities issuable upon conversion/exercise.
Key Covenants and Restrictions:
- Variable Rate Transactions: Prohibited while Notes are outstanding.
- Dividends: Restricted without Majority in Interest of Holders consent.
- Indebtedness: Restricted from incurring debt with an effective annualized cost exceeding 20%.
- Stock Repurchases: Restricted without consent.
Events of Default: Includes failure to pay, bankruptcy, delisting, or failure to maintain reporting status. Upon default, obligations may accelerate to 125% of the outstanding amount, interest rates may increase to 24% (or max legal rate), and a $10,000 monthly monitoring fee applies.
Most-Favored-Nation: Purchasers are entitled to more favorable terms if the Company issues securities with better terms to other investors.
Investor Verification Checklist
- Verify the effective date of the registration statement for the resale of the 600,000 shares and warrant shares.
- Confirm the status of the optional Second Tranche ($5M) and whether any commitments have been made.
- Review the impact of the 110% prepayment penalty and mandatory prepayment of tax refunds on future liquidity.
- Assess the dilution impact of the 1,500,000 warrants (at $2.85) and 900,000 pre-funded warrants.
- Monitor compliance with the 4.99% beneficial ownership limitation on conversions and warrant exercises.
- Check for any subsequent variable rate transactions or equity lines of credit that would trigger a default.