On October 12, 2017, MBII sold Dwight W. Anderson an unsecured promissory note in the principal amount of $1,000,000.00. From the date of the closing through December 31, 2017, the note will bear interest at a rate of 1% per annum, payable in arrears on the maturity date, unless earlier converted into shares of MBII.
Thereafter, beginning January 1, 2018, the note will bear interest at a rate of 10% per annum, payable in arrears on the maturity date, unless earlier converted into shares of MBII common stock as described below.
"Any or all of the principal or accrued interest under the Note may be converted into shares of the Company’s common stock at a rate of one share of common stock per $1.00 of converting principal or interest, rounded down to the nearest share with any fractional amounts cancelled, at the election of the Lender by delivery of written notice to the Company. In addition, upon the consummation of a qualified equity financing of the Company prior to the Maturity Date, the aggregate outstanding principal balance of the Note and all accrued and unpaid interest thereon may convert, at the option of the Lender, into that number of the securities issued and sold in such financing, determined by dividing (a) such aggregate principal and accrued interest amounts, by (b) the purchase price per share or unit paid by the purchasers of the Company’s securities issued and sold in such financing. Notwithstanding the foregoing, Lender’s ability to affect any such conversions will be limited by applicable provisions governing issuances of shares of the Company’s common stock under the rules of The Nasdaq Capital Market, subject to the Company’s receipt of any applicable waivers thereof, and any amounts not issuable to the Lender in the Company’s equity securities as a result of this limitation will be payable in cash."