12. Subsequent Events

The CEO Note

The principal balance of $248,911 and accrued interest on the CEO Note were settled in full in cash on January 3, 2022.

2020 CEO Agreement

In March 2022, the 2020 CEO Agreement was amended to provide an increase of the target bonus to 50% of his annual base salary. In addition, the CEO base salary was increased to $510,000 effective March 1, 2022 to better align his salary with executives at other similar public companies. Dr. Werner was granted 125,000 options to purchase common stock that will vest over 3 years subject to continued employment and 250,000 performance based options also subject to continued employment and achievement of milestones.

Frattaroli Employment Agreement

In March 2022, the Frattaroli Employment Agreement was amended to provide an increase of the target bonus to 40% and to allow for salary adjustments at the discretion by the Board. The CFO base salary was increased to $400,000 effective March 1, 2022 to better align his salary with executives at other similar public companies. Mr. Frattaroli was granted 62,500 options to purchase common stock that will vest over 3 years subject to continued employment and 125,000 performance based options also subject to continued employment and achievement of milestones.

Recent Sales of Unregistered Securities

In January 2022, the Company issued 21,853 shares of its common stock in connection with the exercise of non-qualified stock options with a strike price of $2.02 per share. Issuance costs were not material. No additional rights or options were granted to this accredited investor in connection with this issuance. This issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act as transactions by an issuer not involving any public offering.

In February 2022, an accredited investor subscribed for, and the Company issued 50,000 shares of its stock in exchange for consulting services. The fair value of the stock was $67,000 based upon the closing price of the shares on the date of the transaction. Issuance costs were not material. No additional rights or options were granted to this accredited investor in connection with this issuance. This issuance is exempt from registration pursuant to Section 4(a)(2) of the Securities Act as transactions by an issuer not involving any public offering.