17. SUBSEQUENT EVENTS

Evergreen Provision

Pursuant to the terms of an annual evergreen provision in the 2014 Plan, the number of shares of common stock available for issuance under the 2014 Plan shall automatically increase on January 1 of each year by at least seven percent (7%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, or, pursuant to the terms of the 2014 Plan, in any year, the Board may determine that such increase will provide for a lesser number of shares. In accordance with the terms of the 2014 Plan, effective as of January 1, 2024, the number of shares of common stock available for issuance under the 2014 Plan increased by 309,658 shares, such amount being seven percent (7%) of the outstanding shares of common stock on December 31, 2023. As of January 1, 2024, the 2014 Plan had a total reserve of 1,746,215 shares and there were 899,015 shares available for future grants.

Continued Listing on The Nasdaq Capital Market

On January 8, 2024, the Staff notified the Company that it granted an extension until May 8, 2024 to regain compliance, conditioned upon achievement of certain milestones included in the plan of compliance previously submitted to the Staff, including a plan to raise additional capital.

On February 8, 2024, the Company received a notice from Nasdaq that the Company had regained compliance with the alternative continued listing standard as the Company’s market value of listed securities has been $35,000,000 or greater over the last 10 consecutive business days and that the matter was closed.

Open Market Sale Agreement

On May 31, 2023, the Company entered into the Open Market Sale Agreement with Jefferies pursuant to which Jefferies is serving as the Company’s sales agent to sell shares of the Company’s common stock through an “at-the-market offering.” As of January 29, 2024, the Company was authorized to offer and sell up to $75,000,000 of its common stock pursuant to the Open Market Sale Agreement, an increase from the previous prospectus filed on June 13, 2023 for $16,800,000. From May 31, 2023, through the date hereof, the Company has sold approximately $21,237,000 in aggregate gross proceeds of shares of its common stock under the Open Market Sale Agreement.

On January 30, 2024, the Company delivered written notice to Jefferies that it was suspending and terminating the prospectus supplement dated January 29, 2024, related to the Company’s Common Stock issuable pursuant to the Sale Agreement, pursuant to the terms of the Sale Agreement. The Company will not make any sales of its securities pursuant to the Sale Agreement, unless and until a new shelf registration statement and prospectus supplement is filed. Other than the termination of the ATM Prospectus Supplement, the Sale Agreement remains in full force and effect.

Public Offering

On January 31, 2024, the Company entered into an underwriting agreement with Jefferies, as representative of the several underwriters, relating to an underwritten public offering of 4,325,000 shares of the Company’s common stock, par value $0.0001, at a price to the public of $19.00 per share. The Underwriters were also granted a 30-day option to purchase up to an additional 648,750 shares of Common Stock at the public offering price. On January 31, 2024, the Representative gave notice to the Company of the Underwriters’ election to exercise the option to purchase additional shares, in full. On February 2, 2024, the Company completed the public offering raising gross proceed of approximately $94,500,000 and net proceeds of $88,500,000 after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company.

K2 HealthVentures LLC Debt Conversion

On March 6, 2024, K2HV converted $1,125,000 of the outstanding loan balance into 142,857 shares of the Company's stock at a conversion price of $7.875 per share.