12. |
SUBSEQUENT
EVENTS
The
company has evaluated subsequent events for potential recognition and disclosures through the date the consolidated financial statements
were filed.
Subscription
Agreement
Commencing
February 11, 2019, the “Company entered into and closed Subscription Agreements with accredited investors (the “February
2019 Accredited Investors”) pursuant to which the February 2019 Accredited Investors purchased 1,499,684 shares of the Company’s
common stock for a purchase price of $1,365,000. If, prior to the six month anniversary, the Company issues shares of its common
stock for a purchase price per share less than the purchase price paid by the February 2019 Accredited Investors subject to standard
carve-outs (a “Down Round”), the Company will issue additional shares of common stock (for no additional consideration)
to the February 2019 Accredited Investors such that the effective purchase price per share is equal to the purchase price per
share paid in the Down Round. Benjamin Samuels and Gerald Budde, directors of the Company, acquired 841,928 and 26,310 shares
of common stock, respectively, as part of this offering, provided, however, their per share purchase was $0.9501, which was above
the closing price the date prior to close and they did not receive the Down Round protection.
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