Material Agreement Form 8 K

Item 1.01.

Entry Into a Material Definitive Agreement.

Convertible Note Subscription Agreement

As previously disclosed by Peak Bio, Inc., a Delaware corporation (the "Company"), on its Current Report on Form 8-Kfiled with the Securities and Exchange Commission (the "SEC") on June 7, 2024 (the "June 7, 2024 Current Report"), the Company and certain investors (the "Convertible Note Investors") entered into a convertible note agreement (the "Convertible Notes") pursuant to which the Convertible Note Investors purchased and the Company issued to the Convertible Note Investors Convertible Notes in the aggregate principal amount of $1,324,500.

On July 12, 2024, the Company closed its final round of financing of this Convertible Note pursuant to which Convertible Note Investors purchased and the Company issued to the Convertible Note Investor Convertible Notes in the aggregate principal amount of $2,175,000.

The Convertible Notes carry an interest rate of 10% per annum, have a maturity date of December 18, 2024, and provide for security interest in the Company's intellectual property, automatic conversion and registration rights as follows:

Automatic Conversion:

If a Business Combination (defined below) occurs while the Convertible Notes are outstanding, then the outstanding principal amount of the Convertible Notes and all accrued and unpaid interest shall automatically convert into common stock, par value $0.0001 per share (the "Common Stock") of the Company immediately prior to the closing of the Business Combination at the Conversion Price (defined below) where:

"Business Combination" means any reorganization, recapitalization, reclassification, consolidation or merger involving the Company in which the Common Stock of the Company is converted into or exchanged for securities of another entity (the "Surviving Company") that are traded on a Public Exchange (the "Surviving Company Securities").

"Conversion Price" means the price per share for the Company's Common Stock determined by reference to the purchase price payable in connection with such Business Combination, multiplied by the Discount Rate, where the price per share of the Common Stock is determined by reference to the 30-dayvolume weighted average price of the Surviving Company Securities on the Public Exchange immediately prior to conversion and the exchange ratio (the "Exchange Ratio") used in the Business Combination.

"Discount Rate" means 50%.

"Public Exchange" means the Nasdaq Stock Market, the New York Stock Exchange or another public exchange or marketplace approved by the Company's Board of Directors.

Registration Rights:

Upon the Company's next equity financing after the Initial Closing Date (the "Next Financing") in which the Company provides future investors with registration rights, the Company will provide substantially equivalent registration rights to the Convertible Note Investors with respect to the shares of Common Stock into which the Convertible Notes are convertible, subject to the Convertible Notes Investors' execution of any documents executed by the investors purchasing securities in the Next Financing.

Security Interest:

The Convertible Note provides for a senior security interest in all right, title and interest in and to all of the assets of the Company subject to the terms and conditions of the Security Agreement, by and between the Company and the Convertible Note Investors. The Convertible Note also states that upon completion of an Automatic Conversion, the security interest is automatically removed.

Placement Agent Commission

In connection with the issuance of the Convertible Notes, in consideration for its services in respect thereof, the Company also agreed to pay the following commissions to Paulson Investment Company, LLC (the "Placement Agent"):

Cash Commission:

The Company will pay a cash commission equal to 8% of the gross proceeds received by the Company from Qualified Investors from the closings of these Convertible Notes, where "Qualified Investor" is defined as any potential investor in the offering, including entities controlled by or advised by the Placement Agent, its clients, and their respective affiliates, who or that is introduced to the Company by the Placement Agent and is pre-approved bythe Company in writing.

Equity Commission:

Upon conversion of the Convertible Notes by Qualified Investors into Common Stock of the Company, the Placement Agent will receive shares of restricted Common Stock of the Company equal to 4% of the total number of shares of Common Stock received upon conversion of the Convertible Notes issued by the Company in the offering to Qualified Investors.