Item 1.01. Entry into a Material Definitive Agreement.

On May 18, 2020, the Company entered into a Securities Purchase Agreement (the "SPA") with two institutional investors (each a "Holder" and collectively the "Holders") to sell a new series of senior secured convertible notes (the "Convertible Notes") of the Company in a private placement (the "Private Placement") to the Holders, in the aggregate principal amount of $6,550,000 having an aggregate original issue discount of 19.85%, and ranking senior to all outstanding and future indebtedness of the Company. Pursuant to the SPA, two Convertible Notes (each, an "Initial Note" and collectively the "Initial Notes") in an aggregate original principal amount of $ 4,450,000 will be issued to the Holders in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the "1933 Act"), and Rule 506(b) of Regulation D ("Regulation D") as promulgated by the United States Securities and Exchange Commission (the "SEC") under the 1933 Act, together with the issuance of warrants (the "Warrants" and, together with the Convertible Notes, the "Securities") to acquire common stock of the Company (the "Common Stock"), as described below. Each Initial Note has a face amount of $2,225,000 for which each Holder will pay $1,750,000 in cash. Additional Convertible Notes in an aggregate original principal amount not to exceed $2,100,000 may also be issued to the Holders under the SPA at a later date under certain circumstances. The Convertible Notes are being sold with an original issue discount and do not bear interest except upon the occurrence of an event of default.

The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, as covenanted in the SPA, directly or indirectly, for (i) the satisfaction of any Indebtedness of the Company or any of its subsidiaries ("Subsidiaries"), (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.

The Convertible Notes mature on the eighteen-month anniversary of the issuance date, are payable by the Company in installments and are convertible at the election of the Holders as more fully described below.

Under the terms of the Convertible Notes:

? The Convertible Notes are convertible at any time or times after the

Stockholder Approval Date (as defined below) in whole or in part, at the option

of the holders thereof, into shares of Common Stock at a rate equal to the

amount of principal, interest (if any) and unpaid late charges (if any),

divided by a conversion price of $2.59.

? The floor price per share at which a Convertible Note may be converted is

$0.554.

Under the terms of the Warrants:

? The Warrants are exercisable at any time or times after the Stockholder

Approval Date in whole or in part, at the option of the holders thereof, for

shares of the Common Stock for an exercise price of $2.845.

Notwithstanding the foregoing, as further described below, the Holders are prohibited from converting the Convertible Notes or exercising the Warrants, and any payments of interest and principal in shares of the Common Stock will be held in abeyance, to the extent a Holder would beneficially own more than 4.99% (or 9.99%, if the holder elects the higher threshold) of the Company's outstanding shares of the Common Stock after such conversion or payment.





                       The Securities Purchase Agreement

The SPA contains certain representations and warranties, covenants and indemnities customary for similar transactions. Under the SPA, the Company agreed to hold a stockholder meeting, by no later than July 31, 2020 (the "Stockholder Approval Date"), to approve resolutions (the "Stockholder Resolutions") authorizing the issuance of shares of Common Stock under the Convertible Notes and the Warrants for the purposes of compliance with the stockholder approval rules of the Nasdaq Stock Market ("Nasdaq") (the "Stockholder Approval"). If such approval is not received by July 31, 2020 the Company will be obligated to continue to seek stockholder approval by December 31, 2020 and every six months thereafter until such approval is obtained.





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                             The Convertible Notes



Maturity and Repayment Dates

The Convertible Notes mature (the "Maturity Date") on the eighteen-month anniversary of the date on which they are issued (the "Issuance Date"). The principal amount is payable in equal installments beginning on the six-month anniversary of the Issuance Date and each month thereafter until the Maturity Date. The Convertible Notes must be paid in cash and the Company may not prepay any portion of the principal amount nor interest, if any.





Interest

The Convertible Notes are being sold with an original issue discount and do not bear interest except upon the occurrence of an Event of Default (described below), in which event the applicable rate will be 13.00% per annum.





Conversion

The Convertible Notes are convertible at any time or times after the Stockholder Approval Date in whole or in part, at the option of the holders thereof, into shares of the Common Stock at a rate equal to the amount of principal, interest (if any) and unpaid late charges (if any), divided by a conversion price of $2.59 (the "Conversion Price"). The Conversion Price is subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other similar transaction.

The floor price per share at which a Convertible Note may be converted is $0.554 (the "Floor Price") . . .

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information included in Item 1.01 of this Current Report on Form 8-K is also incorporated by reference into this Item 2.03 of this Current Report on Form 8-K to the extent required.

Item 3.02 Unregistered Sales of Equity Securities

The information included in Item 1.01 of this Current Report on Form 8-K is also incorporated by reference into this Item 3.02 of this Current Report on Form 8-K to the extent required. The Convertible Note, the Conversion Shares and the Payoff Shares are being offering and sold pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder, for the sale of securities not involving a public offering.




Item 8.01 Other Information

On May 19, 2020, the Registrant issued a press release announcing the execution of the SPA. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

The information under this Item 8.01, including Exhibit 99.1, is deemed "furnished" and not "filed" under Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

The information in this Current Report on Form 8-K, including Exhibit 99.1, may contain forward-looking statements based on management's current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained herein that are not historical facts are considered "forward-looking statements." Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. In particular, statements regarding the efficacy of investment in research and development are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including, but not limited to, the effect of political, economic, and market conditions and geopolitical events; legislative and regulatory changes that affect our business; the availability of funds and working capital; the actions and initiatives of current and potential competitors; investor sentiment; and our reputation. The Registrant not undertake any responsibility to publicly release any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this report. Additionally, the Registrant does not undertake any responsibility to update you on the occurrence of any unanticipated events, which may cause actual results to differ from those expressed or implied by any forward-looking statements. The factors discussed herein are expressed from time to time in the Registrant's filings with the Securities and Exchange Commission available at http://www.sec.gov.

Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits.





(d) Exhibits:



Exhibit                     Description

10.1        Form of Securities Purchase Agreement.
10.2        Form of Secured Convertible Promissory Note.
10.3        Form of Warrant.
10.4        Form of Shareholder Pledge Agreement.
10.5        Form of Voting Agreement.
10.6        Form of Registration Rights Agreement.
99.1        Press Release dated May 19, 2020




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