ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On February 28, 2023, Cosmos Health Inc. (the "Company") was issued a five-year
secured promissory note (the "Note") in the principal amount of 4,100,000.00
EUR by Cana Laboratories Holdings (Cyprus) Limited, a corporation organized
under the laws of the Republic of Cyprus ("Cana Holdings"). The Note bears
interest at 5% plus 1 month LIBOR per annum and will be used by Cana Holdings to
cover specified obligations. Cana Holdings and its wholly-owned subsidiary,
Pharmaceutical Laboratories Cana S.A., a corporation organized under the laws of
Greece ("Cana Pharmaceutical") are prohibited from using the proceeds of the
Note for any capitalization or debt repayment without the Company's prior
written consent. The principal amount and all accrued interest and other fees
are due upon maturity and may not be prepaid in whole or in part, except as
provided therein. The Note is a senior secured obligation of Cana Holdings with
first priority on all current and future indebtedness of Cana Holdings and its
subsidiaries. A breach or default under any other financial instrument by Cana
Holdings or Cana Pharmaceutical that results in a Material Adverse Effect shall,
at the Company's option, be declared a default under this Note.
The Note is secured by: (a) a share pledge agreement of same date over all of
the issued and outstanding shares of Cana Pharmaceutical held by Cana Holdings;
and (b) a share pledge agreement of same date over all of the issued and
outstanding shares of Cana Holdings held by the two shareholders of Cana
Holdings, Konstantinos-Gaston Kanaroglou and Konstantina-Mathilde Kanaroglou
(the "Cana Shareholders").
Issuance of the Note and the two share pledges completes the first of two
transactions contemplated by the Binding Letter of Intent concluded by the
Company, Cana Holdings, Cana Pharmaceutical and the Cana Shareholders, dated
July 19, 2022, and amended on January 10, 2023 (the "LOI"). The second
transaction contemplated by the LOI is the acquisition of all of the outstanding
shares of Cana Holdings by the Company pursuant to a stock purchase agreement to
be concluded no later than March 31, 2023.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The information set for under Item 1.01 above is incorporated by reference
herein.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Number
10.1 Secured Promissory Note dated February 28, 2023 issued by Cana
Laboratories Holdings (Cyprus) Limited.
10.2 Cana Holdings Share Pledge Agreement dated as of February 28, 2023.
10.3 Cana Pharmaceutical Share Pledge Agreement dated as of February 28,
2023.
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