| Item 4(a) | Amount Beneficially Owned: As of the date hereof, the Reporting Person may be deemed the beneficial owner of 1,278,173 shares of Common Stock. On April 6, 2022, the Reporting Person entered into a Securities Purchase Agreement with the Issuer pursuant to which the Reporting Person (i) purchased 7,500 shares of Series X Preferred Stock at a price of $1,000 per share, and (ii) agreed to purchase an additional 7,500 shares of Series X Preferred Stock at a price of $1,000 per share if the Issuer raises additional capital by an outside date (the “Second Tranche”). On June 2, 2022, the Issuer met the conditions for the Second Tranche and as a result, on June 16, 2022 the Reporting Person purchased the additional 7,500 shares of the Series X Preferred Stock at a price of $1,000 per share. The Series X Preferred Stock has an initial conversion rate of 1,000 shares of Common Stock per share of Series X Preferred Stock, subject to adjustment as set forth in the Certificate of Designation. On May 9, 2022, the Issuer’s Board of Directors approved the implementation of a reverse stock split as a ratio of one-for-eleven shares, which became effective on May 13, 2022. As a result, each share of Series X Preferred Stock would convert into approximately 91 shares of common stock. Based on this conversion rate, the 15,000 shares of the Series X Preferred Stock held by the Reporting Person represent 1,365,000 shares of Common Stock. However, the Certificate of Designation for the Series X Preferred Stock provides that the Reporting Person shall not have the right to convert any portion of the Series X Preferred Stock to the extent that, after giving effect to an attempted conversion, the Reporting Person, together with its affiliates and any persons acting as a “group” with the Reporting Person, exceeds 9.9% (the “Blocker”). Accordingly, the amount of shares of Common Stock that the Reporting Person has the right to acquire upon conversion of the Series X Preferred Stock is limited by the Blocker to 1,278,173 shares of Common Stock, based on the 11,632,673 shares of Common Stock reported as outstanding as of November 11, 2022 in the Issuer’s quarterly report on Form 10-Q, filed on November 14, 2022, plus the number of shares issuable to the Reporting Person upon conversion of the Series X Preferred Stock held by the Reporting Person under the Blocker, which shares have been added to the total Common Stock outstanding in accordance with Rule 13d-3(d)(1)(i) under the Act.
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| Item 4(b) | Percent of Class:
As of the date hereof, the Reporting Person may be deemed the beneficial owner of approximately 9.9% of the shares of Common Stock outstanding. The percentage set forth herein is calculated based on the sum of (i) 11,632,673 shares of Common Stock outstanding as of November 11, 2022, based on the Issuer’s quarterly report on Form 10-Q, filed on November 14, 2022, and (ii) the number of shares issuable to the Reporting Person upon conversion of the Series X Preferred Stock held by the Reporting Person under the Blocker, which shares have been added to the total Common Stock outstanding in accordance with Rule 13d-3(d)(1)(i) under the Act.
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| Item 4(c) | Number of Shares as to which such person has:
(i) Sole power to vote or direct the vote: 1,278,173*
(ii) Shared power to vote or direct the vote: 0
(iii) Sole power to dispose or direct the disposition of: 1,278,173*
(iv) Shared power to dispose or direct the disposition of: 0 |
