Material Agreement - Form 8-K

Item 1.01. Entry into a Material Definitive Agreement

On April 17, 2024, ProSomnus, Inc. (the "Company") issued and sold to certain existing ProSomnus investors $2,000,000 aggregate principal amount of the Company's Senior Secured Convertible Notes due December 6, 2025 (the "Additional Notes") related to that certain Indenture, dated December 6, 2022, as supplemented by the First Supplemental Indenture entered into on June 29, 2023 (the "First Supplemental Indenture") and the Second Supplemental Indenture entered into on September 20, 2023 (the "Second Supplemental Indenture"), by and among the Company, ProSomnus Holdings, Inc. and ProSomnus Sleep Technologies, Inc., as guarantors (the "Subsidiary Guarantors"), and Wilmington Trust, National Association, as trustee and collateral agent (as so supplemented, the "Indenture"). In connection with the issuance of the Additional Notes, the Company entered into agreements with certain of the holders of its other series of existing convertible notes, including the holders of the Existing Notes (as defined below) to, among other things, consent to the issuance of such Additional Notes.

Subject to certain modifications, the terms of the Additional Notes are substantially identical to the Company's Senior Secured Convertible Notes due December 6, 2025 previously issued under the Indenture (the "Existing Notes"). The Additional Notes bear interest at a rate of 9% per annum and interest on the Additional Notes is payable in cash quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on October 1, 2024. Consistent with the terms of the Existing Notes, the Additional Notes will mature on December 6, 2025, subject to earlier conversion, redemption or repurchase, are guaranteed by the Subsidiary Guarantors and are secured, on a pari passu first lien basis with the Existing Notes and the Company's Senior Secured Convertible Exchange Notes due December 6, 2025 issued on October 11, 2023, by substantially all of the tangible and intangible assets (other than certain excluded assets) of the Company and the Subsidiary Guarantors, as set forth in the Senior Security Agreement, dated December 6, 2022, by and among the Company, the Subsidiary Guarantors and Wilmington Trust, National Association, as collateral agent.

The description of the Additional Notes is qualified in its entirety by reference to the text of the Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, and the Additional Notes, which are filed as Exhibits 4.1, 4.2, 4.3 and 4.4 hereto, respectively, and are incorporated by reference.