Item 2. Unregistered Sales of Equity Securities
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities
During the three months ended March 31, 2022, the Company converted an aggregate of $888,930 in outstanding principal of convertible notes into 873,901 shares of common stock.
From April 1, 2022 through the issuance date, the Company has issued 978,476 shares of common stock pursuant to conversions of outstanding principal of its convertible notes.
On April 8, 2022, the Company and various purchasers (the “Investors”) executed a Securities Purchase Agreement (the “SPA”) whereby the Investors purchased from the Company promissory notes (the “Notes”) in the aggregate principal amount of $3,068,750.
In connection with the issuance of the Notes further to the SPA , the Company issued warrants to acquire 1,257,684 shares of its common stock at an exercise price of $1.22 per share expiring in April 2027.
On May 10, 2022, pursuant to the Underwriting Agreement, the Company issued the Underwriters’ Warrants to purchase up to an aggregate of 1,495,592 shares of common stock. The Underwriters’ Warrants may be exercised beginning on November 1, 2022 until May 5, 2027. The initial exercise price of each Underwriters’ Warrant is $0.325 per share, which represents 130% of the public offering price.
Use of Proceeds from Public Offering of Common Stock
The net proceeds the Company will receive from the sale of 37,389,800 shares of its common stock in the offering, after deducting underwriter discounts and commissions, the non-accountable expense, the underwriters’ expense reimbursement and estimated offering expenses, will be approximately $7,951,285 (approximately $9,237,728 if the underwriters exercise their option to purchase additional shares in full), based on a public offering price of $0.25 per share.
The Company currently intends to use the net proceeds from the offering primarily for general corporate purposes, including working capital. Specifically, the Company used a portion of the net proceeds from the offering to repay the Notes.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
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