Item 1.01 Entry into a Material Definitive Agreement.

On June 9, 2022, Innovation Pharmaceuticals Inc. (the "Company") entered into a Series A Preferred Share Purchase Agreement (the "Purchase Agreement") with Squalus Med Ltd., a company established under the laws of the State of Israel ("SML"), pursuant to which the Company purchased 55,556 shares of SML's Series A Redeemable Preferred Shares (the "Series A Shares") and a warrant (the "Warrant") to purchase 27,778 Series A Shares for aggregate consideration of $4,000,000, or approximately $72.00 per Series A Share. Following the closing under the Purchase Agreement, the Company owns approximately 35.7% of SML's issued and outstanding equity securities and approximately 41.6% of SML's equity securities on a fully diluted basis. The Company also entered into customary investor rights and indemnification agreements with SML.

The Series A Shares are governed by SML's Amended and Restated Articles of Association (the "Articles of Association") and have the following rights and preferences, among others:





    ·   Liquidation preference - In the event of any liquidation or winding up of
        SML, the holders of the Series A Shares will be entitled to receive, in
        preference to the holders of SML's ordinary shares, an amount equal to the
        original purchase price of the Series A Shares or such higher amount as
        would be received if the Series A Shares were converted to ordinary shares
        immediately before the liquidation or winding up.

    ·   Conversion - The holders of the Series A Shares will have the right to
        convert the Series A Shares, at any time, into SML's ordinary shares. The
        Series A Shares will also automatically convert into ordinary shares upon
        the occurrence of a qualified IPO. The initial conversion rate will be
        1:1, subject to adjustment upon the occurrence of certain events set forth
        in the Articles of Association.

    ·   Dividends - Dividends will be paid on the Series A Shares on an
        on-converted basis when paid on SML's ordinary shares.

    ·   Voting and consent rights - The Series A Shares will vote on an
        as-converted basis with SML's ordinary shares. In addition, so long as at
        least 30% of the Series A Shares issued pursuant to the Purchase Agreement
        are outstanding, the holders of the Series A Shares will have consent
        rights over certain actions by SML, including, without limitation,
        amendments to the Articles of Association in a manner adverse to the
        Series A Shares, issuances of securities senior to the Series A Shares,
        and changes to the size of SML's board of directors.

    ·   Board Representation - SML's board of directors consists of three
        directors, including Leo Ehrlich, the Company's Chief Executive Officer,
        as the designee of the preferred shareholders. SML will not take certain
        actions without approval of its board of directors including the designee
        of the preferred shareholders, including, without limitation, incurring
        indebtedness above certain levels, changing SML's business, or enter into
        certain licensing or sales transactions involving SML's technology or
        intellectual property.

The Warrant has an exercise price of $108.00 per Series A Share and is exercisable until the earliest of (i) five years after FDA approval of SML's medical device, as more fully set forth in the Articles of Association, (ii) the closing of a deemed liquidation, (iii) 30 days following consummation of a qualified financing event, or (iv) consummation of an initial public offering by SML.

The foregoing descriptions of the terms and conditions of the Purchase Agreement, Articles of Association and Warrant are not complete and are qualified in their entirety by the full text of the Purchase Agreement, Articles of Association and Warrant, which are filed herewith as Exhibit 10.1 and incorporated into this Item 1.01 by reference.






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Item 7.01 Entry into a Material Definitive Agreement.

On June 15, 2022, the Company issued a press release regarding its investment in SML. A copy of the press release is furnished herewith as Exhibit 99.1.

The information in this Current Report on Form 8-K under this Item 7.01, including the accompanying press release, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by reference to such filing.

Item 9.01 Financial Statements and Exhibits.





(d) Exhibits.



Exhibit No.   Description
   10.1         Series A Preferred Share Purchase Agreement, dated June 9, 2022,
              by and among Squalus Med Ltd. and Innovation Pharmaceuticals Inc.

   99.1         Press release dated June 15, 2022.

    104       Cover Page Interactive Data File (embedded within the Inline XBRL
              document).





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