NOTE 14 – SUBSEQUENT EVENTS

Chief Executive Officer Termination and Replacement

Effective January 4, 2022, the Company terminated Andrew Dahl, its President and Chief Executive Officer.

New Lease

The Company entered into a sublease commencing February 21, 2022 that expires November 2024. The terms of the sublease include rent of $7,265 per month with annual increase of 2.7%, and the Company is responsible for electricity costs. On February 28, 2022, the Company terminated its month-to-month rental arrangement with a related party as described in Note 12 – Related Parties.

Short Term Debt Agreement

On February 21, 2022, the Company entered into a short-term debt agreement with First Insurance Funding to provide $628,600 of financing to fund a portion of the Company’s directors’ and officers’ insurance policy. The financing agreement has an annual percentage rate of 4.15% and has a term of nine months.

2021 Plan Evergreen Provision

Under the 2021 Plan, the shares reserved automatically increase on January 1st of each year, for a period of not more than ten years from the date the 2020 Plan is approved by the stockholders of the Company, commencing on January 1, 2022, and ending on (and including) January 1, 2029, by an amount equal to 5% of the shares of common stock outstanding as of December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board of Directors may act prior to January 1st of a given year to provide that there will be no January 1st increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding sentence. On January 1, 2022, 470,983 shares were added to the 2021 Plan as a result of the evergreen provision.