NOTE 14 – SUBSEQUENT EVENTS

July 2023 Private Placement

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On July 12, 2023, the Company entered into a securities purchase agreement (the “July 2023 Purchase Agreement”) with certain institutional and accredited investors (the “July 2023 Purchasers”) which provides for the private placement (the “July 2023 Private Placement”) of shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock in two tranches, as described below.

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The closing of the initial tranche occurred on July 17, 2023 and consisted of the issuance of (i) 24,260,644 shares of the Company’s common stock and at a price of $0.47 per share, and (ii) pre-funded warrants (the “July 2023 Pre-Funded Warrants”) exercisable for up to 18,331,547 shares of the Company’s common stock. The price of the July 2023 Pre-Funded Warrants was $0.469 per underlying share of the Company’s common stock, and the exercise price for the Pre-Funded Warrants was $0.001 per share. The Company received approximately $20.0 million in gross proceeds in connection with the closing of the initial tranche and net proceeds, following the payment of related offering expenses, of approximately $18.7 million.

The second tranche would consist of the sale of an additional 42.6 million shares of common stock (or additional pre-funded warrants in lieu thereof) on the same pricing terms as the initial tranche, which would represent further gross proceeds of approximately $20.0 million, and would close if the following conditions were met: within a 12 month measurement period (or such longer period as approved by July 2023 Purchasers who purchased a majority of the securities purchased in the initial tranche), shares of the Company’s common stock trade at a 10-day volume weighted average price of at least $1.41 per share with aggregate trading volume during the same 10-day period of at least 10 million shares, and certain other customary closing conditions, including the absence of a material adverse event as

described in the July 2023 Purchase Agreement, are satisfied. This second tranche is a mandatory funding commitment of the July 2023 Purchasers subject to the foregoing conditions. The 12 month measurement period commences on the later of the filing of an amendment to the Company’s certificate of incorporation to implement a reverse stock split of shares of its common stock currently outstanding, without making a reduction in the number of shares of common stock authorized, following stockholder approval, and the effectiveness of a resale registration statement filed in connection with the first tranche closing.

In addition, upon the second tranche closing, the Company would be required to issue to the investors common stock warrants representing the right to purchase an additional 85.2 million shares of the Company’s common stock at an exercise price of $0.47 per share (the “Second Closing Warrants”), in exchange for the payment of $0.125 per share of common stock underlying the Second Closing Warrants. In the aggregate, these Second Closing Warrants would represent 100% warrant coverage of the number of shares of common stock (or pre-funded warrants) sold in the initial tranche and to be sold in the second tranche closing. These Second Closing Warrants would have a term of five years.

Pursuant to the July 2023 Purchase Agreement, the Company granted to the July 2023 Purchasers certain registration rights, pursuant to which, among other things, the Company agreed to (i) file with the SEC a registration statement on Form S-3 after each of the initial tranche and the second tranche to register for resale the shares of common stock issued (and the shares issuable upon exercise of any pre-funded warrants or Second Closing Warrants issued) in the applicable closing, within 30 calendar days following each closing, and (ii) use its commercially reasonable efforts to have each registration statement declared effective as soon as practicable, and in any event no later than 90 days following the applicable closing date (or 120 days following the applicable closing date if the applicable registration statement is reviewed by the SEC). The registration rights covenants are subject to customary terms and conditions for a transaction of this type, including certain customary cash penalties on the Company for its failure to satisfy specified filing and effectiveness time periods. Additionally, the July 2023 Purchase Agreement contains customary representations and warranties and agreements of the Company and the July 2023 Purchasers and customary indemnification rights and obligations of the parties. There can be no assurance as to the timing of the closing of the second tranche, or whether the second tranche will close at all. Additionally, there can be no assurance as to whether the proceeds received from the initial tranche, any potential proceeds received in connection with the second tranche, and/or the proceeds from the exercise, if any, of the warrants issued in connection with the July 2023 Private Placement will be sufficient for the Company to regain compliance with the applicable listing criteria of the Nasdaq Capital Market or will be sufficient for the Company to continue as a going concern. As of the date of the filing, the Company will have stockholders’ equity greater than $2.5 million.