Form of Convertible Promissory Note for 2021 Bridge Financing

Exhibit 4.10

THIS NOTE, AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (THE “SECURITIES”) HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT” OR THE “SECURITIES ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (EXCEPT AS OTHERWISE PROVIDED BELOW).

SECURED CONVERTIBLE PROMISSORY NOTE

Effective (date)

FOR VALUE RECEIVED, EPIEN Medical, Inc., a Minnesota corporation (the “Company” or the “Borrower”), hereby promises to pay to the order of _______________________________ , a _____________ and/or its permitted assigns (the “Holder”), the aggregate principal amount of $_________________________ (the “Principal”), together with interest on the unpaid Principal amount hereof, upon the terms and conditions hereinafter set forth. This Secured Convertible Promissory Note is defined herein as the “Note”. The “Effective Date” of this Note shall be (date). This Note is issued and all rights hereunder shall be held subject to all of the conditions, limitations and provisions set forth herein. Certain capitalized terms used herein have the meanings given to them in that certain Subscription Agreement dated (date) between the Company and certain accredited investors named therein (the “Subscription Agreement”).

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #__

(a) Notwithstanding any provision in this Note, the total liability for payments of Interest and payments in the nature of interest, including all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the State of Minnesota or the applicable laws of the United States of America, whichever shall be higher (the “Maximum Rate”).

(b) In the event the total liability for payments of Interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, which for any month or other interest payment period exceeds the Maximum Rate, all sums in excess of those lawfully collectible as interest for the period in question (and without further agreement or notice by, among or to the Holder the undersigned) shall be applied to the reduction of the Principal balance, with the same force and effect as though the undersigned had specifically designated such excess sums to be so applied to the reduction of the Principal balance and the Holder had agreed to accept such sums as a premium-free prepayment of Principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice in writing to the undersigned, to waive, reduce or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such sums as a prepayment of the Principal balance. The undersigned does not intend or expect to pay nor does the Holder intend or expect to charge, accept or collect any interest under this Note greater than the Maximum Rate.

(c) If any payment of Principal or interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks are not open for business, such payment shall be made on the next succeeding Business Day. “Business Day” means a day other than (i) a Saturday, (ii) a Sunday or (iii) a day on which commercial banks in Minnesota, are authorized or required to be closed for business.

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #

(a) The unpaid Principal balance of this Note, together with all accrued and unpaid Interest and as applicable, the Pre-Payment Penalty (such amount converted by the Holder, the “Aggregate Amount Converted”), is convertible at the option of the Holder, from time to time, following a Qualified Financing, into that number of shares of Common Stock (the “Shares”) as equals the Aggregate Amount Converted divided by 85% of the Public Offering Price, subject to adjustment as discussed herein (the “Conversion Price”)(each a “Conversion” and such option, the “Holder Conversion Option”). In the event that the Conversion occurs within one year of the Effective Date, the Pre-Payment Penalty shall also be deemed due and payable, and such Pre-Payment Penalty may also be converted into Common Stock pursuant to this Section 3(a).

(b) “Public Offering Price” means the actual or implied price per share of Common Stock paid by the purchasers of the Qualified Offering Securities sold in the Qualified Financing, as reasonably determined by the board of directors of the Company.

(c) “Qualified Financing” means the closing of the Company’s first sale of its Common Stock to the public after the date of this Note (including as part of a unit or in the form of, or as part of, a convertible security), in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act, which results in the Common Stock being listed on a national securities exchange or NASDAQ, or quoted on the OTCQB or OTCQX market.

(d) “Qualified Offering Securities” means the equity securities issued by the Company in the Qualified Financing.

(e) Following Qualified Financing, the Company shall within ten (10) Business Days, notify the Holder that a Qualified Financing has occurred, at the address of Holder which the Company then has on record.

(f) In order to exercise the Holder Conversion Option, the Holder shall provide the Borrower a written notice of its intentions to exercise the Holder Conversion Option, which notice shall set forth the amount of this Note to be converted and the applicable Principal, Interest and the applicable Principal and Interest and if applicable, Pre-Payment Penalty to be converted and the calculation of the applicable Conversion Price, which shall be in the form of Exhibit A, attached hereto (“Notice of Conversion”).

(g) The Company shall cause the Shares received upon exercise of the Holder Conversion Option hereunder to be transmitted by its transfer agent (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Borrower is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Shares to or resale of the Shares by the Holder or (B) the Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Conversion (such date, the “Share Delivery Date”). Upon delivery of the Notice of Conversion, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Shares with respect to which this Note has been converted, irrespective of the date of delivery of the Shares.

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #

(h) Notwithstanding the foregoing, If the Borrower reasonably believes that there is an error in Holder’s calculation of the Shares issuable in connection with the Notice of Conversion or the Conversion Price provided for therein, or another issue with the conversion, the Borrower shall not be obligated to honor such defective Notice of Conversion and shall promptly notify Holder of such errors.

(i) Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Note to the Borrower until the Holder has converted the entire amount of this Note, in which case, the Holder shall surrender this Note to the Borrower for cancellation within three (3) Business Days of the date the final Notice of Conversion is delivered to the Borrower. Partial conversions of this Note shall have the effect of lowering the outstanding Principal and Interest due on this Note, as applicable. The Holder and the Borrower shall maintain records showing the actual Principal and Interest on this Note, provided that absent manifest error, the Borrower’s records shall control.

(g) The Borrower shall at all times take any and all additional actions as are necessary to maintain the required authority to issue the Shares to the Holder, in the event the Holder exercises its rights under the Holder Conversion Option.

(h) Following the effective time of any Conversion, all rights of any Holder with respect to the amount of this Note converted, will terminate, except only for the rights of any such Holder to receive certificates (if the Borrower generally issues certificates) for the number of Shares which this Note has been Converted.

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #____

(a) Conversion calculations pursuant to Section 3, shall be rounded to the nearest whole share of Common Stock.

(b) If the Borrower at any time or from time to time on or after the Effective Date effects a subdivision of its outstanding Common Stock, the Conversion Price then in effect immediately before that subdivision shall be proportionately decreased, and conversely, if the Borrower at any time or from time to time on or after the Effective Date combines its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price then in effect immediately before the combination shall be proportionately increased.

(c) The Company shall not effect any exercise of the Holder Conversion Option and a Holder shall not have the right to convert any portion of this Note to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of the Holder Conversion Option with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonconverted portion of this Note owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 4(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 4(c) applies, the determination of whether the Holder Conversion Option is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Note is convertible, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note. The limitations contained in this paragraph shall apply to a successor holder of this Note.

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #____

(a) At the option of the Holder, at any time after the earlier of (i) the date that the Company has completed a subsequent capital raise or capital raises (whether through the sale of debt or equity) in the aggregate amount of at least $10 million after the date of this Note; or (ii) has completed a Qualified Financing, the Holder may, by written notice to the Borrower, declare the Principal amount then outstanding of, and the accrued Interest and all other amounts payable on (including where applicable, the Pre-Payment Penalty) this Note to be immediately due and payable (an “Acceleration”)

(b) If a Change of Control (as defined below) occurs and the Holder has not approved such Change of Control in writing (unless such Change of Control has been waived by Holder), Holder shall have the right, by written notice to the Company, to declare the entire amount of this Note, including all Principal and Interest and Pre-Payment Penalty immediately due and payable (a “Change of Control Acceleration”). “Change of Control” means (i) the completion by the Company of a plan of merger or consolidation of the Company with any other Person as a result of which the holders of the voting capital stock of the Company as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation or entity; (ii) the closing of a transaction involving the Company providing for the sale or transfer of substantially all the assets of the Company; or (iii) the acquisition of more than 50% of the Company’s voting capital stock by any person within the meaning of Rule 13d-3 under the Exchange Act (other than the Company or a Person that directly or indirectly controls, is controlled by, or is under common control with, the Company), in each case unless approved by the written consent of the Holder.

(a) Borrower shall fail to pay, when and as due, the Principal, Interest or any other amount payable hereunder (including, where applicable, the Pre-Payment Penalty) ; or

(b) Borrower shall have breached in any material respect any material covenant in this Note, the Subscription Agreement, the Subordination Agreement, the terms of the Warrants, or the Security Agreement, and, with respect to breaches capable of being cured, such breach shall not have been cured within ten (10) days from the date that the Holder has provided the Borrower written notice of such breach; or

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #____

(c) Borrower shall: (i) become insolvent or take any action which constitutes its admission of inability to pay its debts as they mature; (ii) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or a trustee for it or a substantial portion of its assets; (iii) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation or statute of any jurisdiction, whether now or hereafter in effect; (iv) have filed against it any such petition or application in which an order for relief is entered or which remains undismissed for a period of ninety (90) days or more; (v) indicate its consent to, approval of or acquiescence in any such petition, application, proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or a substantial portion of its assets; or (vi) suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ninety (90) days or more; or

(d) Borrower shall take any action authorizing, or in furtherance of, any of the foregoing.

In case any one or more Events of Default shall occur and be continuing, the Holder, may proceed to protect and enforce the rights of the Holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or for an injunction against a violation of any of the terms hereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise, and shall also be authorized to take all actions to enforce the security interest set forth in the Security Agreement. In case of a default in the payment of any Principal of or premium, if any, or Interest on this Note, Borrower will pay to the Holder such further amount as shall be sufficient to cover the reasonable cost and expenses of collection, including, without limitation, reasonable attorneys’ fees, expenses and disbursements. No course of dealing and no delay on the part of the Holder in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice the Holder’s rights, powers or remedies. No right, power or remedy conferred by this Note upon the Holder shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #____

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #____

EPIEN Medical, Inc.

Secured Convertible Promissory Note
Note #____

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EPIEN Medical, Inc.

Secured Convertible Promissory Note

Note #____

IN WITNESS WHEREOF, the undersigned have caused this Secured Convertible Promissory Note to be executed and delivered as of the date first above written, to be effective as of the Effective Date set forth above.

EPIEN Medical, Inc.

Secured Convertible Promissory

EXHIBIT A

Conversion Election Form

____________, 20

Re: Conversion of Convertible Promissory Note CN-Ladies and Gentlemen:

You are hereby notified that, pursuant to, and upon the terms and conditions of that certain Secured Convertible Promissory Note CN-_____________________ of EPIEN Medical, Inc. (the “Company”) dated____________________, 2021 in the amount of $________ (the “Note” – certain capitalized terms used herein have the meanings given to such terms in the Note), held by us, we hereby elect to effect a Conversion (as such term in defined in the Note), in connection with $______________________ of the amount currently owed under the Note (including $______________________ of Principal and $________ of accrued Interest), effective as of the date of this writing, which amount will convert into_____________________ shares of the Common Stock of the Company (the “Conversion”), respectively, based on Conversion Price of $__________________________ (as defined in the Note). Please issue certificate(s) for the applicable securities issuable upon the Conversion, in the name of the person provided below. The Conversion will not cause us to exceed the Beneficial Ownership Limitation. We hereby re-confirm and re-certify the Representations in connection with, and as of the date of, this notice.

EPIEN Medical, Inc.

Secured Convertible Promissory Note

Note #____