Item 1.01
Entry into a Material Definitive Agreement.
On May 5, 2021, we entered
into an agreement with Aedesius Holdings Ltd. (“Aedesius”) pursuant to which we have agreed with Aedesius that we would sell
them up to 16,000,000 units (the “Units”) of our company for a total aggregate of up to $20,000,000. Pursuant to the Agreement,
we will sell each Unit for $1.25. Aedesius is required to purchase a minimum of 4,000,000 Units, for an aggregate purchase price of $5,000,000,
by June 30, 2021 and may purchase up to an additional 12,000,000 Units for $15,000,000, and an aggregate of $20,000,000 of total gross
proceeds, by September 30, 2021. If the warrants are exercised by the expiry date of October 31, 2021, the total investment into the company
will be $30,000,000.
Each Unit consists of
one share of our common stock and half a warrant (each whole warrant, a “Warrant”) to purchase a share of our common stock.
The Warrants are exercisable until October 31, 2021. If we sell the minimum of Units in this offering, we will issue 2,000,000 warrants
which, if exercised, would result in an additional $2,500,000 of gross proceeds. If we sell the maximum of Units in this offering, we
will issue 8,000,000 warrants which, if exercised, would result in an additional $10,000,000 of gross proceeds. We intend to use the proceeds
from this placement for general corporate purposes, and we may use some of the proceeds from the placement for the repurchase of outstanding
shares of Series A preferred stock and shares of Series B preferred stock. It is a closing condition for the sale of the maximum 16,000,000
Units hereunder that we have no shares of Series A preferred stock or shares of Series B preferred stock outstanding.
We have granted Aedesius
a right of first refusal to negotiate any proposed capital raise within six months of the date of the Agreement, provided that if Aedesius
fully exercises the Warrants purchased hereunder, such right of first refusal shall be extended for an additional 18 months. The right
of first refusal does not apply to a public offering of our securities if such public offering is for not more than $15 million and is
conducted at a per share offering price of $1.50 or more.
We have further agreed
that if Aedesius purchases 8,000,000 Units in the placement, we shall appoint one member of Aedesius to our Board of Directors.