Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Amendment
of Employment Agreement
On
September 22, 2021, the Board of Directors of the Company approved a second amendment, which became effective on September 27, 2021 (“Amendment
No. 2”), of the employment agreement of Timothy Jones, the Company’s President and Chief Executive Officer (the “Employment
Agreement”). Mr. Jones is also a director of the Company.
The
Amendment reduces the annual Base Salary from $300,000 to $231,000 from October 1, 2021 through March 31, 2022 and restores the annual
Base Salary to $300,000 on April 1, 2022. Each month commencing on October 1, 2021 and ending on the last day of the month and on a monthly
accumulating basis thereafter until March 31, 2022, during which the Company raises at least $200,000 up to an aggregate amount equal
to or greater than $1,200,000, the Base Salary shall be paid in cash at the rate of $19,250 per month as described in Exhibit A to Amendment
No. 2. Upon receipt of a financing equal to or greater than the financing amounts in Exhibit A, the appropriate payment obligation shall
be wired by the Company to the Executive within two business days of receipt and shall otherwise be due no later than on the dates in
Exhibit A.
After
March 31, 2022, until such time as at least $2,500,000 has been raised, which, for the purposes of this Section 6, shall include cash
actually received plus any reasonably certain and unqualified contractual rights to receive cash within one year, such salary may be
accrued and remain unpaid, at the discretion of the Board. In the event that a payment due in accordance with the schedule that is Exhibit
A to Amendment No. 2, is not timely paid, and is not cured by payment during the subsequent month inclusive of such subsequent month’s
payment due, Executive’s Base Salary shall revert back to $300,000 per year, the schedule that is Exhibit A shall become null and
void and the adjustment to a $0 Guaranteed Bonus as described in Section 6.2(iii) of Amendment No. 2 and below shall also be deemed null
and void and a payment of $150,000 shall become due and payable as of the same date that the Base Salary is adjusted to $300,000.
If
$10,000,000 is raised by April 30, 2022, Mr. Jones’ annual Base Salary will be adjusted to $375,000. Furthermore, if the Board
determines that a sufficient amount of funds have been raised or is otherwise available to fund the Company’s operations on an
ongoing basis, some or all of the accrued and unpaid Base Salary or Guaranteed Bonus (as described in Section 6.2 of Amendment No. 2)
may be paid in cash.
The
Amendment also amends the structure of Mr. Jones’ guaranteed bonus by (i) eliminating the $150,000 guaranteed bonus that would
have accrued on September 30, 2021 unless a payment due in accordance with Exhibit A of Amendment No. 2 is not timely paid or otherwise
cured, the Guaranteed Bonus shall be restored to $150,000 as of the same date that the Base Salary is adjusted to $300,000 per year.
No
other amendments were made to the Employment Agreement.
Prior
to the approval of Amendment No. 2, the Employment Agreement was filed by the Company on May 6, 2020, as Exhibit 99.1 to a Current Report
on Form 8-K. Prior to the approval of Amendment No. 2, the first amendment to the Employment Agreement dated July 31, 2020, was filed
by the Company on August 3, 2020 as Exhibit 99.5 to a Current Report of Form 8-K. The description of Amendment No. 2 does not purport
to be complete and is qualified in its entirety by reference to the full text of Amendment No. 2, a copy of which is attached as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated herein by reference.