Note 9. Subsequent Events

Private placement of common stock and warrants through placement agent

During September 2023, approximately 2.5 million additional units were sold in the private placement conducted by the Company through a placement agent, for gross proceeds of approximately $0.5 million and net proceeds of approximately $0.4 million based on a price of $0.20 per unit. Each unit comprised a fixed combination of one share of common stock and one warrant to purchase one share of common stock. The purchase price per unit will be equal to 90% of the lower of (i) the VWAP of the common stock as of the first closing on July 31, 2023, and (ii) the intraday VWAP on the date of the final closing which has not yet occurred. The warrants issued to investors in the private placement, which covered a total of approximately 2.5 million shares, have a five-year term and an exercise price of $0.50 per share, and are immediately exercisable. Refer to Note 5, Equity Awards and Warrants – Private Placement of Common Stock and Warrants through Placement Agent for additional information.

Induced note conversions

During October 2023, in satisfaction of redemptions, the Company and the April 2, 2021 Noteholder entered into an exchange agreement, pursuant to which a portion of the April 2, 2021 Note was partitioned into a new note with an aggregate principal amount of $0.5 million, which were exchanged concurrently with the issuance of approximately 3.5 million shares of common stock.

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