Note 12. Private Equity Securities Offerings

On March 20, 2019, the Company issued in private placements to accredited investors an aggregate of 3,246 shares of its Series C Preferred Stock, together with warrants to purchase an aggregate of up to approximately 3.9 million shares of its common stock, with an initial exercise price of $0.50 per share, for aggregate gross proceeds to the Company of approximately $3.2 million. In connection with the private placement, the Company issued and sold to certain lead investors additional warrants to purchase an aggregate of up to 1.0 million shares of Common Stock, on identical terms to the other warrants issued to investors.

On August 29, 2019 the Company issued the remaining 1,754 shares of Series C Preferred Stock at $1,000.00 per share for cash proceeds totaling approximately $1.5 million, net of placement agent fees and legal fees totaling approximately $0.2 million.

During the three months ended August 31, 2019, in connection with a Series C convertible preferred offering, as fully described in Note 4, the Company issued common stock warrants covering a total of approximately 2.6 million shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.50 per share.

On October 11, 2019, the Company amended its certificate of designation to authorized an increase in authorized Series C Preferred Stock from 5,000 shares to 20,000 shares. Between October 21, 2019 and November 8, 2019, the Company issued an additional 2,788 shares of Series C Convertible Preferred Stock, and on December 6, 2020 the Company issued 415 shares of Series C Convertible Preferred Stock. On January 28, 2020, the Company further amended its Series C Certificate of Designation to reduce the number of authorized shares of Series C Preferred Stock from 20,000 shares to 8,203 shares, all of which remain outstanding as of May 31, 2020.

During the year ended May 31, 2019, the Company conducted private equity offerings (the “2019 Equity Offerings”), in which accredited investors purchased unregistered shares of common stock at $0.50 per share with warrant coverage of 50% based on the number of shares purchased. Pursuant to the 2019 Equity Offerings, the Company sold a total of approximately 47.0 million shares for aggregate gross proceeds of approximately $23.5 million and issued five-year warrants covering approximately 23.5 million shares, with an exercise price of $0.75 per share. In conjunction with the 2019 Equity Offerings, the Company paid an aggregate cash fee of approximately $2.7 million to the placement agent and issued warrants covering an aggregate of approximately 4.4 million shares to the placement agent as additional compensation.

On July 31, 2019, the Company concluded a private warrant exchange in which accredited investors purchased unregistered shares of common stock at the lower of the stated exercise price on their warrant or $0.40 per share. The Company sold a total of approximately 7.5 million shares, as well as approximately 3.8 million additional shares as an inducement to exercise their warrants, for a total of approximately 11.3 million shares. Aggregate gross proceeds from the private warrant exchange were approximately $3.0 million. In conjunction with the private warrant exchange, the Company incurred a non-cash inducement interest expense of approximately $0.2 million and paid an aggregate cash fee of approximately $0.3 million to the placement agent. See Note 17.

On December 20, 2019, the Company entered into a private warrant exchange in which certain accredited investors purchased unregistered shares of common stock at a range of $0.22 to $0.25 per share as compared to the stated exercise prices ranging from $0.45 to $0.75 per share. The Company sold approximately 3.4 million shares, as well as approximately 1.3 million additional shares as an inducement to exercise their warrants, for a total of approximately 4.7 million shares. Aggregate gross proceeds from the private warrant exchange were approximately $0.8 million.

On December 30, 2019, the Company entered into a private warrant exchange in which certain accredited investors purchased unregistered shares of common stock at a reduced exercise price per share of $0.50 for any warrant with a stated exercise price greater than $0.50 per share and no discount for warrants with a stated exercise price equal to or less than $0.50 per share. The Company sold 2.2 million shares, as well as 0.5 million additional shares as an inducement to exercise their warrants, for a total of approximately 2.7 million shares. Aggregate gross proceeds from the private warrant exchange were approximately $1.1 million.

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On January 31, 2020, the Company issued 7,570 shares of Series D Convertible Preferred Stock, $0.001 par value per share (“Series D Preferred Stock”), at $1,000.00 per share for cash proceeds totaling approximately $7.6 million, net of offering costs of $4,645.

On March 13, 2020, the Company entered into subscription agreements with certain investors for the sale of 882 shares of Series D convertible preferred stock at a purchase price of $1,000.00 per share (“March 13, 2020 offering”). The investors in the March 13, 2020 offering also received warrants to purchase approximately 0.3 million shares of common stock with an exercise price of $1.00 per share and a five-year term. The Company received net proceeds from the March 13, 2020 offering of approximately $0.9 million.

During January 2020, the Company entered into a private warrant exchange in which certain accredited investors purchased unregistered shares of common stock at a reduced exercise price per share of $0.50 for any warrant with a stated exercise price greater than $0.50 per share and no discount for warrants with a stated exercise price equal to or less than $0.50 per share. The Company issued approximately 4.0 million shares, as well as approximately 0.4 million additional shares as an inducement to exercise their warrants, for a total of approximately 4.4 million shares. Aggregate gross proceeds from the private warrant exchange were approximately $1.9 million.

On February 28, 2020, the Company entered into a private warrant exchange in which certain accredited investors purchased unregistered shares of common stock at a range of $0.18 to $0.45 per share as compared to the stated exercise prices on their warrants, which ranged from $0.30 to $0.75 per share. The Company issued approximately 7.8 million shares, as well as approximately 0.8 million additional shares as an inducement to exercise their warrants, for a total of approximately 8.6 million shares. Aggregate gross proceeds from the private warrant exchange were approximately $2.2 million.

On March 4, 2020, the Completed a private warrant exchange in which an accredited investor purchased shares of common stock at a price of $0.45 per share as compared to the stated exercise price of $0.75. The Company issued 80,000 shares, as well as 8,000 additional shares as an inducement to the investor to exercise the warrants, for a total of 88,000 shares, resulting in gross proceeds of approximately $36,000.

For the fiscal year-ended May 31, 2020 the Company recorded non-cash inducement interest expense totaling approximately $5.5 million in connection with the private warrant exchange offerings.

On June 17, 2020, the Company entered into privately negotiated warrant exchange agreements with certain accredited investors, pursuant to which the investors purchased shares of common stock at a range of $0.21 to $0.70 per share in exchange for warrants with exercise prices ranging from $0.35 to $1.35 per share. The Company issued approximately 16.5 million shares in exchange for approximately 16.5 million warrants to purchase common stock, which resulted in net aggregate proceeds of approximately $7.4 million after offering costs of approximately $0.4 million. In connection with this transaction, the Company recognized approximately $3.3 million in non-cash inducement interest expense.

On October 14, 2020, the Company entered into privately negotiated warrant exchange agreements with certain accredited investors, pursuant to which the investors purchased common stock at a range of $0.24 to $0.80 per share in

exchange for warrants with exercise prices ranging from $0.30 to $1.00 per share. The Company issued approximately 7.0 million shares of common stock, $0.001 par value, in exchange for approximately 6.4 million warrants to purchase common stock, which resulted in net aggregate proceeds of approximately $2.7 million. In connection with this transaction, the Company recognized approximately $2.2 million of non-cash inducement interest expense.

On October 26, 2020, the Company entered into privately negotiated warrant exchange agreements with certain accredited investors, pursuant to which the investors purchased shares of common stock at a range of $0.24 to $0.60 per share in exchange for warrants with an exercise prices ranging from $0.30 to $0.75 per share. The Company issued approximately 5.0 million shares in exchange for approximately 4.5 million warrants to purchase common stock, which resulted in net aggregate proceeds of approximately $1.6 million. In connection with this transaction, the Company recognized approximately $1.4 million of non-cash inducement interest expense.

On November 30, 2020, the Company entered into privately negotiated warrant exchange agreements with certain accredited investors, pursuant to which the investors purchased shares of common stock at $0.60 per share in exchange for warrants with an exercise price of $0.75 per share. The Company issued approximately 0.5 million shares in exchange for 0.5 million warrants to purchase common stock, which resulted in net aggregate proceeds of approximately $0.3 million. In connection with this transaction, the Company recognized approximately $0.2 million of non-cash inducement interest expense.

On November 17, 2020, the Company sold approximately 0.67 million unregistered shares of common stock at a purchase price of $1.50 per share to Christopher P. Recknor, M.D., Chief Operating Officer, who was a non-executive at the time of the transaction, for aggregate proceeds to the Company of $1.0 million. The transaction was approved by the Board. See Note 17.

On December 4, 2020, the Company entered into a privately negotiated warrant exchange agreement with an accredited investor, pursuant to which the investor purchased shares of common stock at $0.36 per share in exchange for warrants with an exercise price of $0.45 per share of common stock. The Company issued approximately 0.3 million shares of common stock, $0.001 par value, in exchange for approximately 0.3 million warrants to purchase common stock, which resulted in net aggregate proceeds of approximately $0.1 million. In connection with this transaction, the Company recognized approximately $0.1 million of non-cash inducement interest expense.

On December 8, 2020, the Company entered into a privately negotiated warrant exchange agreement with an accredited investor, pursuant to which the investor purchased shares of common stock at $0.24 per share in exchange for warrants with an exercise price of $0.30 per share. The Company issued approximately 2.0 million shares in exchange for approximately 1.9 million warrants to purchase common stock, which resulted in net aggregate proceeds of approximately $0.4 million. In connection with this transaction, the Company recognized approximately $0.7 million of non-cash inducement interest expense.

On January 28, 2021, the Company entered into privately negotiated warrant exchange agreements with certain accredited investors, pursuant to which the investors purchased unregistered shares of common stock at a range of $0.45 to $0.75 per share in exchange for warrants with exercise prices ranging from $0.90 to $1.50 per share. The Company issued approximately 3.6 million shares in exchange for approximately 2.5 million warrants to purchase common stock, which resulted in net aggregate proceeds of approximately $2.9 million. In connection with this transaction, the Company recognized approximately $3.4 million of non-cash inducement interest expense and approximately $0.1 million in offering costs.

On March 18, 2021, the Company entered into a private warrant exchange in which an accredited investor purchased unregistered shares of common stock at a range of $0.60 to $0.90 per share in exchange for warrants with exercise prices ranging from $0.30 to $0.45 per share. The Company issued approximately 0.1 million shares of common stock, as well as approximately 0.1 million additional shares as an inducement to the investor to exercise the warrants, for a total of approximately 0.2 million shares. Aggregate gross proceeds from the private warrant exchange were approximately $0.1 million. In connection with this transaction, the Company recognized approximately $32,000 of non-cash inducement interest expense.

On April 2, 2021, the Company entered into a private warrant exchange in which an accredited investor purchased unregistered shares of common stock at $0.90 per share in exchange for warrants with an exercise price of $0.45 per share. The Company issued approximately 0.8 million shares of common stock, as well as approximately 0.3 million additional shares as an inducement to the investor to exercise the warrants, for a total of approximately 1.1 million shares. Aggregate gross proceeds from the private warrant exchange were approximately $0.7 million. In connection with this transaction, the Company recognized approximately $0.1 million of non-cash inducement interest expense.

As described in Note 5, a total of approximately 19.9 million shares of common stock were issued in exchange for the retirement of the March 2020 Note, the July 2020 Note, and partial repayment of a portion of the November 2020 Note during the fiscal year ended May 31, 2021.

For the year-ended May 31, 2021 the Company recorded non-cash inducement interest expense of approximately $11.4 million in connection with the private warrant exchange offerings.