Item 1.01 Entry Into A Material Definitive
Agreement.
On June 13, 2022, Brain Scientific Inc. (the “Company”),
consummated the first closing (the “Closing”) of a private placement offering (the “Offering”) whereby the Company
entered into a Securities Purchase Agreement, dated as of June 13, 2022 (the “SPA”) with thirteen (13) accredited investor
(the “Holders”), pursuant to which the Holders purchased from the Company, for an aggregate purchase price of $5,110,000 (the
“Purchase Price”) (i) 10% Original Issue Discount Senior Secured Convertible Debentures in the principal amount of $5,659,500(the
“Debentures”); and (ii) 18,896,495 warrants (the “Warrants”) to purchase shares of common stock of the Company,
par value $0.001 per share (the “Common Stock”).
The Debentures
are due, subject to the terms therein, 12 months from their date of issuance unless extended pursuant to the terms thereunder (the “Maturity
Date”).
The Warrants shall be exercisable at any time
on or after the earlier of (i) the Maturity Date; or (ii) the closing of a registered offering of the Company’s securities for
aggregate gross proceeds to the Company of at least $5,000,000, resulting in the listing for trading of the Common Stock on the NYSE
American or The Nasdaq Capital Market (the “Qualified Offering”), and on or prior to on or prior to 5:00 p.m. (New York City
time) on December 13, 2028 (if no Qualified Offering has been consummated occurred on or prior to the Maturity Date of the Debentures)
or the date that is five years and six months following the closing of the Qualified Offering.
The Debentures contain
mandatory and voluntary conversion features as follows:
(a) Mandatory Conversion.
In the event a Qualified
Offering is consummated prior to the Maturity Date of the Debentures, the Debentures automatically convert into shares of Common Stock,
immediately upon the occurrence of a Qualified Offering (the “Mandatory Conversion”). The exercise price per share of
Common Stock pursuant to the Warrant shall mean, in the case of a Mandatory Conversion, the price of the Common Stock (or unit, if units
are offered in the Qualified Offering) in the Qualified Offering.
(b) Voluntary Conversion.
The Holders of the Debentures
have the right (subject to the conversion limitations set forth therein) from time following the Maturity Date and prior to a Mandatory
Conversion to convert all or any part of the outstanding and unpaid principal and interest then due under the Debentures into fully paid
and non-assessable shares of Common Stock (the “Voluntary Conversion”). The exercise price per share of Common Stock pursuant
to the Warrant shall mean, in the case of a Voluntary Conversion, the lower of (i) $0.25 per share or (ii) 75% of the average of the VWAP
of the Company’s Common Stock during the ten (10) Trading Day period immediately prior to the Maturity Date.
In connection with the
Offering, each of Piezo Motion Corp., a Delaware corporation (“Piezo”) and Memory MD, Inc., a Delaware corporation (“Memory”,
and together with Piezo, the “Company Subsidiaries”) agreed to execute, in favor of the Holders, a guarantee (the “Guarantee”)
to jointly and severally, unconditionally and irrevocably, guarantee to the Holders the prompt and complete payment and performance when
due of the Company’s obligations pursuant to the SPA.
In connection with the
Offering, the Company entered into a security agreement (the ”Security Agreement”) by and among the Company, each of the Holders
and the Company Subsidiaries, whereby the Company agreed to grant each of the Holders a security interest in all of the assets of the
Company, to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the Debentures
and the Company Subsidiaries’ obligations under the Guarantee.
Additionally, in connection with the Offering, holders of certain existing
convertible notes of the Company (the “Existing Convertible Notes”) agreed pursuant to an agreement with the Company to convert
the Existing Convertible Notes into an aggregate of approximately 54,536,573, shares of the Company’s common stock based on a conversion
price of $0.25 per share, including principal and interest. To incentivize the existing noteholders to convert, the Company increased
the principal amount of the Existing Convertible Notes by $1,175,741 resulting in the approximate aggregate principal amount of $12,933,155
being converted into equity, plus interest. In connection with their original investment, these holders will also be entitled to warrants
(the “Original Warrants”) based on 50% coverage of their original investment amount. These Original Warrants will have a term
of four years after issuance and an exercise price of $0.25 per share. The holders also agreed to waive and forgo the rights to the registration
of the securities underlying the Existing Convertible Notes and Original Warrants.
Item 1.01 of this Current Report on Form 8-K contains
only a brief description of the material terms of SPA, the Debenture, the Warrant, the Guarantee and the Security Agreement, and does
not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are qualified
in their entirety by reference to the full text of the SPA, Debenture, the Warrant, the Guarantee and the Security Agreement, the forms
of which are attached as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to this Current Report on Form 8-K, and are incorporated
herein by reference.