Material Agreement Form 8 K

On December 17, 2024, the Company entered into a Consent and Amendment Agreement (the "Agreement") with certain holders (the "Holders") of securities issued in the Company's June 2023 private placement (the "2023 Private Placement") pursuant to which, among other things, the Holders agreed to (i) amend certain of the terms of the Purchase Agreement, dated June 14, 2023 (as previously amended, the "Purchase Agreement"), as described below and (ii) amend and restate certain of the provisions of the Company's Series A-1 Convertible Preferred Stock, Stated Value $10,000 per share (the "Series A-1 Preferred Stock"), as described below, effective immediately prior to the closing of a "Qualified Offering" (the "Effective Time"). The Agreement defines a Qualified Offering as a sale of shares of the Company's common stock and/or common stock equivalents pursuant to an effective registration statement under the Securities Act of 1933, as amended, or in a side-by-side private placement, at an effective price per share at least equal to the then applicable Nasdaq "Minimum Price" resulting in at least $4,000,000 of gross proceeds to the Company. No Qualified Offering has occurred on or prior to the date of this Current Report on Form 8-K and no assurance can be given that a Qualified Offering will occur or as to the terms thereof. If no Qualifying Offering occurs the amendments and restatements summarized herein will not occur and the current terms of the Purchase Agreement and the Series A-1 Preferred Stock will remain in effect.

Amendments to the Purchase Agreement

In the Agreement, the parties agreed to amend the Purchase Agreement effective as of the Effective Time to (i) delete the provisions of (A) Section 4.12(a) of the Purchase Agreement, which had prevented the Company from effecting the issuance of its common stock and common stock equivalents for a period of 180 days after the initial closing of the 2023 Private Placement (the "Initial Closing") and which had expired by its terms; (B) Section 4.17 of the Purchase Agreement, which restricts the Company's ability to pay dividends; (C) Section 4.18 of the Purchase Agreement, which grants certain participation rights to Significant Purchasers (as defined in the Purchase Agreement) in connection with a Subsequent Financing (as defined in the Purchase Agreement); (D) Section 4.19 of the Purchase Agreement, which grants Significant Purchasers certain "most favored nation" rights; and (E) Section 4.20 of the Purchase Agreement, which permits Significant Purchasers to exchange their Series A-1 Preferred Stock for the securities sold in a Subsequent Financing. In addition, the parties agreed to amend Section 4.12(b) of the Purchase Agreement effective as of the Effective Time to (i) extend the period during which the Company is prohibited from engaging in a "Variable Rate Transaction" (as defined in the Purchase Agreement) until the end of the 18-month period following the Effective Time; and (ii) provide that after the six-month anniversary of the Effective Time the Company may make sales of common stock in at-the-market offering at a gross price per share at least equal to the price at which shares of common stock are sold in the Qualified Offering (the "Qualified Offering Price"). The parties also agreed to amend 4.12(c) of the Purchase Agreement effective as of the Effective Time to (i) require the Company to obtain the consent of not less than 65% of the Original Significant Purchasers (as defined in the Agreement) of the Series A-1 Preferred Stock for a "Lower Price Issuance" (as defined in the Purchase Agreement); (ii) lower the price at which a Lower Price Issuance would be deemed to occur from the current conversion price of the Series A-1 Preferred Stock to $4.00; and (iii) reduce the time period during which such consent would be required from 30 months from the Initial Closing to the earlier of (A) 18 months from the closing of a Qualified Offering and (B) the date on which the Company has received gross proceeds of not less than $15 million from one or more financing transactions (including the Qualified Offering).

In the Agreement, the Holders also consented to a Qualified Offering and the Hewlett Settlement (described below) and irrevocably waived any rights they had with respect thereto. The Holders also agreed to become parties to the Registration Rights Agreement with respect to any new securities to be issued to them in connection with the transactions contemplated by the Agreement and a Qualified Offering.