SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

16)	SUBSEQUENT EVENTS

Private Placement of Convertible Notes and Warrants

On July 13, 2023, the Company entered into the Purchase Agreement with certain investors for the Private Placement of $8.7 million in aggregate principal amount of Notes and the issuance of the Note Warrants to purchase an aggregate of approximately 6.1 million shares of common stock. The Private Placement closed on July 14, 2023 (the “Closing Date”), and the Company intends to use the net proceeds from the Private Placement for general working capital purposes.

The Notes bear interest at 6% per annum, payable quarterly in arrears. At the Company’s election, it may pay interest either in cash or in-kind by increasing the outstanding principal amount of the Notes. The Notes mature on July 14, 2028, unless earlier converted or repurchased. The Company may not redeem the Notes at its option prior to maturity.

At the option of the investors, the Notes may be converted from time-to-time in whole or in part into shares of common stock at an initial conversion rate of $2.86 per share, subject to customary adjustments for stock splits, stock dividends and recapitalization.

The Notes do not contain any ratchet or other financial antidilution provisions. The Notes purchased by certain of the investors contain conversion limitations, providing that no conversion may be made if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 4.99%, 9.99% or 19.99% immediately after conversion thereof, subject to certain increases not in excess of either 9.99% or 19.99% at the option of such holder.

The Notes provide for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, the following: nonpayment of principal or interest; breach of covenants or other agreements in the Notes; and certain events of bankruptcy. Generally, if an event of default occurs and is continuing under the Notes, the holder thereof may require the Company to repurchase some or all of their Notes at a repurchase price equal to 100% of the principal amount of the Notes being repurchased, plus accrued and unpaid interest thereon.

The Note Warrants are immediately exercisable, have an exercise price of $2.61 per share, expire five years following the Closing Date and are subject to customary adjustments. The Note Warrants purchased by certain of the investors contain a provision pursuant to which such Note Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof would exceed 4.99%, 9.99% or 19.99% immediately after exercise thereof, subject to certain increases not in excess of either 9.99% or 19.99% at the option of such holder.

Amendment to Exclusive License Agreement

On July 12, 2023, the Company entered into the Exclusive License Agreement Amendment. See Note 8 for additional information.