12. Convertible Notes Payable

On December 24, 2020, the Company issued an $100,000 6% Secured Convertible Promissory Note which was convertible into shares of the Company’s common stock at a price per share of $2.80. The note was fully-repaid (including all accrued but unpaid interest) on March 14, 2021.

On January 19, 2021, the Company issued a $15,000 Secured Convertible Promissory Note which was convertible into shares of the Company’s common stock at a price per share of $1.05. The note was fully-repaid (including all accrued but unpaid interest) on March 14, 2021.

Auctus Fund Financing

On March 11, 2021, the Company Auctus Fund, LLC, a Delaware limited liability company (“Auctus”) a senior secured convertible promissory note in the principal amount of $1,680,000, which includes $180,000 of interest which was deemed fully earned as of the Issuance Date (the “Auctus Note”). The Auctus Note was fully-repaid (including all principal and interest) on March 15, 2022 with a one-time cash payment of $1,680,000.

Investor Private Placement Offering

On September 2, 2021, the Company conducted a closing of a private placement offering (the “September 2 Offering”) with twenty accredited investors (the “September 2 Investors”) whereby the Company entered into a securities purchase agreement (the “September 2 Purchase Agreement”) with the September 2 Investors pursuant to which the Company issued to the Investors subordinated secured convertible promissory notes in the aggregate principal amount of $1,620,000 (the “September 2 Notes”). The net proceeds received by the Company were $1,504,400 (after deducting fees owed to its placement agent, Alere (as defined and discussed below)). The Company intended to use the net proceeds for working capital and general corporate purposes.

The Notes have a maturity date of one year from September 2, 2021. The Notes bear interest at a rate of 12% per annum, which is also payable on maturity, with the understanding that the first 12 months of interest (equal to an aggregate of $194,400) is guaranteed and deemed to be earned in full as of September 2, 2021. In the event the Company fails to pay any amount when due under the September 2 Notes, the interest rate will increase to the greater of 18% or the maximum amount permitted by law. The September 2 Notes may be prepaid during the first 180 calendar days from September 2, 2021 subject to a 110% prepayment penalty on all principal and accrued but unpaid interest then outstanding. The September 2 Notes may not be prepaid in whole or in part after 180 calendar days from September 2, 2021. The September 2 Investors may convert any amount due under the September 2 Notes at any time, and from time to time, into shares of the Company’s common stock at a conversion price of $5.25 per share; provided, however, that the September 2 Investors may not convert any portion of the September 2 Notes that would cause such Investor to beneficially own in excess of 4.99% of the Company’s common stock. The conversion price and number of shares of the Company’s common stock issuable upon conversion of the September 2 Notes will be subject to adjustment from time to time for any subdivision or consolidation of shares and other dilutive events. If the Company issues common stock or securities convertible into common stock at a per share price lower than the conversion price of $5.25 (the “Base Price”), then the conversion price of the September 2 Notes will be reduced to the new Base Price at the option of the holder.

On January 25, 2022, the Company repaid a September 2 Investor in full with a one-time cash payment of $300,000 of outstanding principal and accrued but unpaid interest the September 2 Offering. The Company did incur a 105% pre-payment penalty of $16,800 with respect to the repayment of the investor’s note and the repayment extinguished the note in its entirety.

As of June 30, 2022, the September 2 Notes’ outstanding balance was $1,239,503, which consisted of principal of $1,478,400, net of unamortized balance of $195,182 of a beneficial conversion and warrant features, unamortized original issue discount of $27,415 and unamortized debt issuance costs of $16,302.