Item 3.02 Unregistered Sales of Equity Securities.
In November 2019 and December 2019, we issued $450,000 aggregate principal
amount of convertible promissory notes, or the Notes, to entities affiliated
with Domain Associates LLC, one of our significant stockholders, for $450,000 in
cash proceeds. The Notes accrue interest at a rate of 8.0% per year and mature
on the first anniversary of the applicable issue date, ranging from November
2020 to December 2020. The Notes issued in December 2019, or the December Notes,
were issued on the form attached hereto as Exhibit 99.1, which is incorporated
herein by reference. The Notes issued in November 2019, or the November Notes,
were issued on the form attached as Exhibit 10.24 to our Quarterly Report on
Form 10-Q for the quarter ended June 30, 2019.
In the event that we issue and sell shares of our preferred stock or common
stock to investors in a qualified financing with total proceeds to us of not
less than $5.0 million, excluding conversion of the Notes, then the outstanding
principal amount of the Notes and any unpaid accrued interest will automatically
convert in whole into equity securities sold in the qualified financing at a
conversion price equal to the cash price paid per share, in the case of the
November Notes, or 0.70 multiplied by the cash price paid per share, in the case
of the December Notes, for equity securities by the investors in the qualified
financing.
Each issuance of Notes described above was deemed to be exempt from registration
under the Securities Act of 1933, as amended, or the Securities Act, in reliance
upon Section 4(a)(2) of the Securities Act as a transaction by an issuer not
involving a public offering. The purchasers of the Notes in each of these
transactions represented their intentions to acquire the Notes for investment
only and not with a view to or for sale in connection with any distribution
thereof. Appropriate legends were affixed to the Notes issued in these
transactions.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Description
99.1 Form of convertible promissory note issued to entities affiliated with
Domain Associates LLC in December 2019.
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