ORAGENICS INC

Notes to Consolidated Financial Statements

December 31, 2023 and 2022

1. Basis of Presentation

The Company

Oragenics, Inc. (formerly known as Oragen, Inc.) (the “Company” or “we”) was incorporated in November 1996. Commencing in December of 2023, we are focused on the development of medical products that treat brain related illnesses and diseases and our lead product candidate and focus is on the development and commercialization of ONP-002 for the treatment of mild traumatic brain injury (“mTBI” or “Concussion”).

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) including the assumption of a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

Reverse Stock Split

In December of 2022 the Board of Directors approved an amendment to the Company’s articles of incorporation to affect a reverse stock split of the Company’s common stock by a ratio of one for sixty. The Company’s common stock began trading on a split adjusted basis on January 23, 2023. All references to common stock for the comparable fiscal year ended December 31, 2022, have been adjusted to reflect the effect of the reverse split.

Going Concern Consideration

In light of our recurring losses, accumulated deficit and negative cash flow the report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2023 contained an explanatory paragraph raising substantial doubt about our ability to continue as a going concern.

The Company has incurred recurring losses and negative cash flows from operations since inception. To date the Company has not generated significant revenues from operations. The Company incurred a net loss of $(20,655,737) and used cash of $(7,290,880) in its operating activities during the year ended December 31, 2023. As of December 31, 2023, the Company had an accumulated deficit of $(206,218,254).

Historically, the Company’s major sources of cash have been comprised of proceeds from various public and private offerings of its common stock and preferred stock, warrant exercises, income earned on grants and interest income. For the fiscal year ended December 2023 the Company raised approximately $0.8 million in gross proceeds from a private placement and sale of its common stock. The Company expects to incur substantial expenditures to further develop its concussion drug. The Company believes the working capital at December 31, 2023, will be sufficient to meet the business objectives through the second quarter of 2024. A subsequent financing in March of 2024 raised approximately $2.1 million in gross proceeds and approximately $1.8 million in net proceeds. The Company anticipates that these additional cash resources will continue to fund research and development activities and operating expenses through the third quarter of 2024.

These matters, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is defined as within one year after the date that our consolidated financial statements are issued.

The Company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in the Company’s focus and direction of its research and development programs, competitive and technical advances, or other developments. Additional financing will be required to continue operations after the Company exhausts its current cash resources and to continue its long-term plans for clinical trials and new product development. There can be no assurance that any such financing can be realized by the Company, or if realized, what the terms thereof may be, or that any amount that the Company is able to raise will be adequate to support the Company’s working capital requirements until it achieves profitable operations.

The Company intends to seek additional funding through sublicensing arrangements, joint venturing or partnering, sales of rights to technology, government grants and public or private financings and may receive funding through the exercise of outstanding warrants. The Company’s future success depends on its ability to raise capital and ultimately generate revenue and attain profitability. The Company cannot be certain that additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to the Company. If the Company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and the Company’s current shareholders may experience dilution. If the Company is unable to obtain funds when needed or on acceptable terms, the Company may be required to curtail its current development programs, cut operating costs and forego future development and other opportunities.

2. Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements include the accounts of Oragenics, Inc. and our wholly-owned subsidiary Noachis Terra, Inc. All intercompany balances and transactions have been eliminated.

New Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that we adopt as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its financial position or results of operations upon adoption.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The principal areas of estimation reflected in the consolidated financial statements are stock-based compensation.

Reclassification – Certain prior year amounts have been reclassified to conform to the current year presentation. The reclassification did not result in a change in the net loss.

Accounting for Mergers and Acquisition

ASC 805, Business Combinations, provides a model for determining whether an acquisition represents a business combination. In order to be a business, the integrated set of activities of the acquired entity needs to have an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired entity must also pass the “Screen Test” which involves determining whether the acquisition represents an in-substance asset acquisition based on whether the fair value of the gross assets acquired is “substantially all” concentrated in a single asset or group of similar assets. This evaluation excludes certain acquired assets such as cash, deferred taxes, and goodwill associated with deferred taxes, but includes all other gross assets, including any consideration transferred in excess of the identified assets.

The Company accounted for the acquisition of the Odyssey neurology assets as an asset acquisition after determining that the transaction did not meet the criteria of a business combination. The Company determined that substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets, the most significant of which is the in-process research and development asset associated with the concussion product candidates. The net assets were recorded at fair value at the date of acquisition and the in-process research and development was recorded as research and development expense in the Company’s consolidated statement of operations.

Cash and Cash Equivalents

Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. The Company’s cash and cash equivalents are deposited in a financial institution and consist of demand deposits and overnight repurchase agreements and at times deposits are in excess of federally insured limits.

Other Receivables

Other receivables are recorded at their net realizable value and consist of amounts due for reimbursable expenses relating to work performed under the terms of the Company’s federal grant.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is provided on the straight-line method over the estimated useful lives of the assets (three to seven years). Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term of the related asset (three years).

Business Segments

In accordance with US GAAP, the Company is required to report segment information. As the Company only operates principally in one business segment, no additional reporting is required.

Stock-Based Payment Arrangements

Generally, all forms of stock-based payments, including stock option grants, and warrants are measured at their fair value on the awards’ grant date using a Black-Scholes Pricing Option Pricing Model. Stock-based compensation awards issued to non-employees for services rendered are recorded at the fair value of the stock-based payment. The expense resulting from stock-based payments are recorded in research and development expense or general and administrative expense in the consolidated statement of operations, depending on the nature of the services provided. Stock-based payment expense is recorded over the requisite service period in which the grantee provides services to us. To the extent the stock option grants or warrants do not vest at the grant date they are subject to forfeiture.

Stock-Based Compensation

US GAAP requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values as of the grant date. Stock-based compensation expense is recorded over the requisite service period in which the grantee provides services to us, to the extent the options do not vest at the grant date and are subject to forfeiture. For performance-based awards that do not include market-based conditions, we record share-based compensation expense only when the performance-based milestone is deemed probable of achievement. We utilize both quantitative and qualitative criteria to judge whether milestones are probable of achievement. For awards with market-based performance conditions, we recognize the grant-date fair value of the award over the derived service period regardless of whether the underlying performance condition is met. The Company made an accounting policy election to account for forfeitures in compensation expense as they occur.

Impairment of Long-Lived Assets

The Company periodically reviews their long-lived assets for impairment and reduces the carrying value to fair value whenever events or changes in circumstances indicate that the carrying value may not be recoverable. There were no impairment losses recorded during the years ended December 31, 2023, and 2022.

Research and Development Expenses

Research and development consist of expenses incurred in connection with the discovery and development of our product candidates. These expenses consist primarily of employee-related expenses, which include salaries and benefits and attending science conferences; expenses incurred under our license agreements with third parties and under other agreements with contract research organizations, investigative sites and consultants that conduct our clinical trials and a substantial portion of our nonclinical studies; the cost of acquiring and manufacturing clinical trial materials; facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities and equipment, and depreciation of fixed assets; license fees, for and milestone payments related to, in-licensed products and technology; stock-based compensation expense; and costs associated with nonclinical activities and regulatory approvals. Prepayments and upfront payments to third party vendors for work to be completed in the future are recorded as a prepaid expense on the Company’s balance sheet. The Company expenses research and development costs on the consolidated statement of operations as expense is incurred or completed.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in operations in the period that includes the enactment date. Deferred tax assets are reduced to estimated amounts expected to be realized by the use of a valuation allowance. Based on our historical operating losses, a valuation allowance has been recognized for all deferred tax assets.

Under US GAAP, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, US GAAP provides guidance on derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition.

Concentrations

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains cash accounts in commercial banks, which may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. As of December 31, 2023, the uninsured portion of this balance was $3,102,203. As of December 31, 2022, the uninsured portion of this balance was $11,176,785.

Grant revenue

Grant revenue is derived from a small business innovation research grant in the amount of $250,000 (“Computer-aided Design for Improved Lantibiotics”). The Company recognizes grant revenue as reimbursable grant costs are incurred up to the pre-approved award limits within the budget period. The costs associated with these reimbursements are reflected as a component of research and development expenses in the accompanying consolidated statement of operations.

3. Acquisition of Concussion Assets

On December 28, 2023, the Company entered into an Asset Purchase Agreement with Odyssey Health, Inc. to purchase their intellectual property assets for their neurology products ONP-001 and ONP-002.

At the closing of the transaction the aggregate fair value of the transaction was $10,273,506, consisting of $1,000,000 cash, assumed accounts payable balances of $325,672, the Company’s Series F Preferred Shares (8,000,000 issued in the transaction).

The Company evaluated the acquisition transaction and determined that it should be accounted for as an asset purchase. Furthermore, it was determined that the assets acquired were in-process research and development and therefore the aggregate fair value of the purchase price was recorded in research and development expenses in 2023.

4. Property and Equipment, net

Property and equipment, net consists of the following as of December 31, 2023 and 2022:

Depreciation and amortization expense for the years ending December 31, 2023 and 2022 was $27,391 and $44,667 respectively. In September of 2023 we terminated our lease for the building where some of our research and development activities for our lantibiotic program were undertaken. As a result, all our property and equipment assets were disposed of as of December 31, 2023. Our loss on the disposal of assets was approximately $52,000 offset by a gain on sale of assets of $22,443 for the fiscal year ending December 31, 2023.

5. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following as of December 31, 2023 and 2022:

6. Short-Term Notes Payable

The Company had the following short-term notes payable as of December 31, 2023 and 2022:

In 2023, the Company did not maintain product liability insurance. In the year ended 2022, the Company also maintained a product liability insurance policy which had been renewed in subsequent periods without premium financing.

7. Prepaid Expense Assets – Current and Long-Term

As of December 31, 2023, the Company determined that vaccine program prepaid research and development expense paid to a vendor in 2022 should be reclassified from prepaid current assets to a long-term asset. As a result of vaccine program delays it is not expected that the prepaid amount will be recognized as realized expense in 2024.

8. Shareholders’ Equity

Common Stock

Reverse Split

On December 23, 2022, the Company announced a reverse split of its common stock, $0.001 par value, at a ratio of one for sixty, which became effective January 20, 2023 (the “Effective Date”). The Company’s common stock began trading on a split-adjusted basis on January 23, 2023 under the existing trading symbol “OGEN”.

As a result of the reverse split, each 60 pre-split shares of common stock outstanding were automatically combined into one new share of common stock without any action on the part of the holders, and the number of outstanding common shares was reduced from approximately 117 million shares to approximately 2.0 million shares. The reverse split also applied to common stock issuable upon the exercise of the Company’s outstanding stock options. In addition, the Company also announced that the authorized common stock of the Company was decreased from 250 million to approximately 4.16 million shares. The authorized preferred stock remains at 50,000,000 shares. The common stock issued pursuant to the reverse stock split will remain fully paid and non-assessable. The reverse stock split did not affect the par value of the common stock.

Private Placement

On August 4, 2023, we entered into a Securities Purchase Agreement with two healthcare-focused investors, to purchase an aggregate of (i)404,728 shares of our common stock, $0.001 par value, and (ii)404,728 shares of Series E Mirroring Preferred Stock. The gross proceeds from the offering were approximately $850,000.

Odyssey Asset Acquisition

As part of the Asset Purchase Agreement with Odyssey, on December 28, 2023, Odyssey converted 511,308 shares of their Series F Preferred Shares into 511,308 shares of our common stock, $0.001 par value.

Other Share Issuances.

On August 8, 2023, the Compensation Committee and Board of Directors approved restricted stock awards to certain executive officers and directors in the amount of 140,000 shares of common stock,110,000 shares vested immediately, and the remaining 30,000 shares vested six (6) months from the date of the award. The restricted stock awards were subject to the terms and conditions of the Company’s form of restricted stock award agreement which include earlier vesting upon a change in control of the Company.

Preferred Stock

Odyssey Preferred Stock

On December 28, 2023, as part of consideration paid to Odyssey and pursuant to the Asset Purchase Agreement executed with Odyssey, we issued 8,000,000 shares of convertible Series F Preferred Stock, the Series F Preferred Stock is convertible on a one-for one basis. The Series F Preferred Stock has no voting rights, is ranked junior to our Series A and Series B Preferred Stock and is at parity with our common stock, in addition there shall be no dividends paid on the Series F Preferred Stock.

Series E Mirroring Preferred Stock

On August 4, 2023, we entered into a Securities Purchase Agreement with two healthcare-focused investors, to purchase an aggregate of (i)404,728 shares of our common stock, $0.001 par value, and (ii)404,728 shares of Series E Mirroring Preferred Stock.

The Company proposed an amendment to its Amended and Restated Articles of Incorporation, in connection with the Company’s 2022 annual meeting of shareholders, to effect an increase in the shares of Common Stock the Company is authorized to issue from 4,166,666 shares of Common Stock to 350,000,000 shares of Common Stock (the “Amendment”). The Series E Preferred Stock had super voting rights on the proposed amendment equal to 2,500 votes per share of Series E Preferred Stock. Pursuant to the Purchase Agreement, the investors agreed to vote their common stock in favor of the amendment. The Series E Preferred automatically voted in favor and against the amendment in the same proportion as the shares of common stock cast at the annual meeting in favor and against the amendment.

The Series E Mirroring Preferred shares had no voting rights except, solely and exclusively with respect to the Amendment and any proposal to adjourn any meeting of shareholders called for the purpose of voting on the Amendment, voting together with the Common Stock and any other issued and outstanding shares of preferred stock of the Company as a single class.

On December 14, 2023, upon effectiveness of the Amendment, each share of Series E Preferred Stock automatically transferred to the Company and was cancelled for no consideration with no action on behalf of the holders of Series E Preferred Stock. The shares resumed the status of authorized but unissued preferred stock and as of December 31, 2023, were no longer designated as Series E Mirroring Preferred Stock.

Warrants

The Company’s outstanding and exercisable warrants as of December 31, 2023 are presented below:

All outstanding warrants are classified as equity on the Company’s Consolidated Balance Sheets.

9. Stock Compensation Plan

The purpose of the 2021 Incentive Plan is to advance the interests of the Company by affording certain employees and Directors of the Company and key consultants and advisors an opportunity to acquire or increase their proprietary interests in the Company. The 2021 Incentive Plan authorizes the grant of stock options (incentive and non-statutory), stock appreciation rights and restricted stock. Options are granted at the fair market value of the Company’s stock on the date of grant. Options can generally vest either immediately or over a period of up tothree years from their respective grant dates and expire 10 years from the date of grant.

Recipients of stock awards under our 2021 Incentive Plan become the owner of record of the stock immediately upon grant, which may be subject to certain restrictions. The balance of unvested restricted stock will be forfeited and automatically transferred back to us at no cost upon the termination of the recipient’s employment. Upon vesting of restricted stock that is made to recipients who are employees, the recipient has the option to settle minimum withholding taxes by electing to have us withhold otherwise deliverable shares having a fair market value equal to the required tax obligations (“net-settlement”). The net-settlement shares are then immediately cancelled and retired and reduce the shares available for issuance under the Company’s 2021 Incentive Plan.

The Company uses the Black-Scholes Pricing Option Pricing Model to estimate the fair value of stock-based awards on the date of grant. The assumptions employed in the calculation of the fair value of share-based compensation expense were calculated as follows for all years presented:

The following table summarizes the assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2023 and 2022:

Total compensation cost related to stock options was $550,082 and $742,203 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, there was $287,858 of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of less than one year.

The following table represents stock option activity for the year ended December 31, 2023:

The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the years ended December 31, 2023 and 2022:

The following table represents restricted stock activity for the year ended December 31, 2023:

The total fair value of restricted stock vested in 2023 was $451,580. For the year ended December 31, 2023, share-based compensation expense under the plan for restricted stock was about $466,745. There wasno restricted stock granted in the year 2022. As of December 31, 2023, there was $5,055 of unrecognized compensation expense related to non-vested restricted shares. This cost is expected to be recognized over a weighted-average period of one month.

10. Retirement Plan

The Company has a defined contribution Simple Individual Retirement Arrangement plan, which covers all employees and provides for a Company match of up to 3% of all employee compensation to the plan. Total matching contributions made by the Company for the years ended December 31, 2023 and 2022 were $20,045 and $26,907 respectively.

11. Income Taxes

The components of the provision for income taxes for the years ended December 31, 2023 and 2022 are as follows:

At December 31, 2023 and 2022, the Company had temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective income tax bases, as measured by enacted state and federal tax rates, as follows:

The following is a reconciliation of tax computed at the statutory federal rate to the income tax expense (benefit) in the statements of operations for the years ended December 31, 2023 and 2022:

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the levels of historical taxable income and projections of future taxable income over which the deferred tax assets are deductible, the Company believes that it is more likely than not that it will not be able to realize the benefits of these deductible differences.

Accordingly, a valuation allowance of $46,958,449 and $41,166,891 has been provided in the accompanying consolidated financial statements as of December 31, 2023 and 2022, respectively. The December 31, 2023 and December 31, 2022 net change in valuation allowance related to deferred tax assets was an increase of $5,791,558 and $3,714,988, respectively, primarily relating to the capitalization of research and development costs and net operating loss carryforwards.

At December 31, 2023, the Company has federal and state tax net operating loss carryforwards of $153,575,836 and $137,731,183, respectively. The State of Pennsylvania tax net operating loss carryforwards will expire through 2036. Federal and Florida tax net operating loss carryforwards generated prior to December 31, 2017 will expire through 2037 and are not subject to taxable income limitations. Federal and Florida tax net operating loss carryforwards generated subsequent to December 31, 2017, do not expire but may be subject to taxable income limitation pursuant to the Tax Cuts and Jobs Act that was enacted on December 22, 2017. The Company also has federal research and development tax credit carryforwards of $4,169,354 of which are included as an uncertain tax position. The federal tax credit carryforward will expire beginning in 2021 and continuing through 2043 unless utilized.

Utilization of net operating loss carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or, could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“IRC Section 382”) and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change, as defined by IRC Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The Company has completed several financings since its inception which may result in a change in ownership as defined by IRC Section 382 or could result in a change in control in the future.

For the years ended December 31, 2023 and 2022, the Company incurred $46,229 and $940,106, respectively, of additional unrecognized tax benefits that related to research and development credits. The entire amount of this unrecognized tax benefit, if recognized, would result in an increase to the deferred tax asset valuation allowance, and would not have an impact on the effective tax rate.

The Company files its income tax returns in the U.S. federal jurisdiction and in Florida and Pennsylvania. With few exceptions, the Company is no longer subject to federal or state income tax examinations by tax authorities for years before 201.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Included in the balance at December 31, 2023 and 2022, are $4,169,354 and $4,834,847, respectively, of tax positions for which there is uncertainty about the validity of certain credits. The disallowance of the credits would impact the amount of gross deferred tax assets reflected in the accompanying footnotes.

During the years 2023 and 2022 the Company did not recognize any interest and penalties. Due to the potential offset of the Company’s operating loss carryforward for any future activity, the amount attributed to interest and penalties would be immaterial.

12. Commitments and Contingencies

Leases

Lab Facility-Alachua. The Company’s Alachua facility was leased from a real estate developer for a term of five years beginning in December 2014. Under the lease agreement, the rental payments ranged from $9,641 per month to $10,851 per month. In June of 2019, the Company entered into an amendment for the Alachua facility for a term offive years beginning in December of 2019. Under the amended lease agreement, the rental payments ranged from $12,870 per month to $13,338 per month. In September of 2023, we exercised our early termination option for this lease. Total rental expense for the Alachua facility during the year ended December 31, 2023, was $276,493, which amount includes the early termination fee equal to nine (9) months’ rent.

Corporate Office-Tampa. In November of 2016, the Company entered into an amendment for the leased office space for corporate personnel located in Tampa, FL. The amended lease is for approximately 2,207 square feet. The lease period for the office space was for thirty-six months commencing in March of 2017. Lease payments ranged from $4,138 per month to $4,392 per month inclusive of insurance, taxes and utilities. In November of 2019, the Company entered into an amendment for the Tampa facility for a term ofthree years beginning in March of 2020. Under the amended lease agreement, the rental payments range from $4,524 per month to $4,800 per month. Total rent expense under this lease was approximately $69,464 for the year ended December 31, 2023.Our lease for this space expired on February 29, 2024.

Maturities of operating lease liabilities are as follows:

The cost component of operating leases is as follows:

Supplemental cash flow information related to operating leases is as follows:

13. Subsequent Events

Termination of our At the Market

On January 23, 2024, we announced the termination of our At the Market Agreement with Ladenburg Thalmann & Co. Inc. dated February 24, 2023.

Shelf Financing

On January 16, 2024, we filed a Preliminary Prospectus with the SEC announcing our intent to raise capital through the sale of common stock from our available and reserved shares under our shelf registration statement on Form S-3 filed with the SEC on May 29, 2020. Subsequently on March 1, 2024, we announced that we had executed the sale of 1,400,000 shares of our common stock at a price of $1.50 per share to the public and $1.395 per share to the underwriter. In addition, we granted the underwriters of the transaction an option exercisable 45 days from the date of the agreement to purchase up to an additional 210,000 shares of common stock solely for the purpose of covering over-allotments.

Resignation of Chief Operating Officer

On February 12, 2024, we announced that we had entered into a mutually agreeable Separation Agreement with Kimberly Murphy, our former Chief Operating Officer. Ms. Murphy continues to serve as a member of our Board of Directors. Following Ms. Murphy’s separation, Charlie Pope our Chairman of the Board was named as Executive Chairman and will provide direction during the transition in management. In addition, the Board of Directors appointed our President, Mr. Redmond, as Interim Principal Officer.

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