Item 5.03 Amendments to Articles of Incorporation or Bylaws: Change
in Fiscal Year.
The information set forth in Item 1.01 of this Current
Report on Form 8-K is incorporated by reference into this Item 5.03.
Series A Preferred Stock
As described
above, in conjunction with the Transaction, on November 3, 2022 the Company filed a Certificate of Designation of Preferences, Rights
and Limitations of the Series A Preferred Stock (the “Series A Certificate of Designation”), which became effective
immediately with the Secretary of State of the State of Delaware, attached hereto as Exhibit 3.1. Pursuant to the Series A Certificate
of Designation, the Company designated up to 15,000 shares of the Company’s previously undesignated preferred stock as Series A
Preferred Stock. The Series A Preferred Stock is not subject to increase without the written consent of the holders of a majority of the
then outstanding shares of the Series A Preferred Stock voting as a separate class (each, a “Series A Holder” and collectively,
the “Series A Holders”). Each share of Series A Preferred Stock shall have a par value of $0.0001 per share and a stated
value equal to $1,000 (the “Series A Stated Value”). The shares of Series A Preferred Stock previously issued on November
7, 2022 and the shares of Series A Preferred Stock issued in the Private Placement shall have identical terms and
include the terms as set forth below.
Dividends. The Series A
Holders are entitled to receive, and the Company shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-common-stock
basis, disregarding for such purpose any conversion limitations set forth in the Series A Certificate of Designations) to and in the same
form as dividends actually paid on shares of the Company’s common stock when, as and if such dividends are paid on shares of the
common stock. No other dividends shall be paid on shares of Series A Preferred Stock. The Company will not pay any dividends on its common
stock unless the Company simultaneously complies with the terms set forth in the Series A Certificate of Designation.
Liquidation. Upon any dissolution,
liquidation or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the Series A Holders
will be entitled to receive out of the assets available for distribution to the stockholders, (i) after and subject to the payment in
full of all amounts required to be distributed to the holders of another class or series of stock of the Company ranking on liquidation
prior and in preference to the Series A Preferred Stock, (ii) ratably with any class or series of stock ranking on liquidation on parity
with the Series A Preferred Stock and (iii) in preference and priority to the holders of the shares of the Company’s common stock,
an amount equal to 100% of the Series A Stated Value, and no more, in proportion to the full and preferential amount that all shares of
the Series A Preferred Stock are entitled to receive. The Company shall mail written notice of any Liquidation not less than twenty (20)
days prior to the payment date stated therein, to each Series A Holder.
Conversion. Each share
of Series A Preferred Stock shall be convertible, at any time and from time to time from and after the later of (i) the date of the stockholder
approval as described above, in accordance with the Nasdaq Stock Market Listing Rules, and (ii) the nine (9) month anniversary of the
Closing (the “Initial Conversion Date”), at the option of the Series A Holder, into that number of shares of common
stock (subject to the limitations set forth in Series A Certificate of Designations, determined by dividing the Stated Value of such share
of Series A Preferred Stock by the Conversion Price (as defined below)). The Series A Holders may effect conversions by providing the
Company with the form of conversion notice attached as Annex A to the Series A Certificate of Designation. The Series A Holders may convert
such shares into shares of the Company’s common stock at a conversion price per share equal to the greater of (i) one dollar ($1.00)
and (ii) ninety percent (90%) of the closing price of the Company’s common stock on Nasdaq on the day prior to receipt of a conversion
notice (collectively, the “Conversion Price”), subject to adjustment for stock splits and similar matters. In addition,
following the Initial Conversion Date, each Series A Holder agrees that it shall not be entitled to in any calendar month, sell a number
of Series A Conversion Shares into the open market in an amount exceeding more than ten percent (10%) of the number of Series A Conversion
Shares issuable upon conversion of the Series A Preferred Stock then held by such Series A Holder.
Conversion Price Adjustment:
Stock Dividends and Stock Splits.
If the Company, at any time while the Series A Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution
or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents (which, for avoidance
of doubt, shall not include any shares of common stock issued by the Company upon conversion of, or payment of a dividend on, the Series
A Preferred Stock), (ii) subdivides outstanding shares of common stock into a larger number of shares, (iii) combines (including by way
of a reverse stock split) outstanding shares of common stock into a smaller number of shares, or (iv) issues, in the event of a reclassification
of shares of the common stock, any shares of capital stock of the Company, then the conversion price of the Series A Preferred Stock shall
be multiplied by a fraction of which the numerator shall be the number of shares of common stock (excluding any treasury shares of the
Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of common stock outstanding
immediately after such event. Any of the foregoing adjustments shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the
case of a subdivision, combination or re-classification.
Fundamental Transaction.
If, at any time while the Series A Preferred Stock is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind (a “Person”), (ii) the Company (and all of its subsidiaries, taken as a whole), directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of the Company’s common stock are permitted to sell, tender
or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%) or more of
the outstanding common stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the common stock or any compulsory share exchange pursuant to which the common stock is effectively
converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than fifty percent (50%)
of the outstanding shares of common stock (not including any shares of common stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, the Series A Holder shall have the right to receive, for each
conversion share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction
(without regard to any limitation set forth in the Series A Certificate of Designation on the conversion of the Series A Preferred Stock),
the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and/or any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of common stock for which the Series A Preferred Stock is convertible immediately prior to such Fundamental
Transaction (without regard to the limitations set forth in the Series A Certificate of Designation on the conversion of the Series A
Preferred Stock). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of common stock in such
Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of common stock are given any choice
as to the securities, cash or property to be received in a Fundamental Transaction, then the Series A Holder shall be given the same choice
as to the Alternate Consideration it receives upon such Fundamental Transaction.
Voting Rights. The Series
A Holders will have no voting rights, except as otherwise required by the Delaware General Corporation Law. Notwithstanding the foregoing,
as long as any shares of Series A Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders
of a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class, (i) alter or change adversely the
powers, preferences or rights given to the Series A Preferred Stock in the Series A Certificate of Designation, (ii) increase the number
of authorized shares of Series A Preferred Stock, (iii) authorize or issue an additional class or series of capital stock that ranks senior
to the Series A Preferred Stock with respect to the distribution of assets on liquidation or (iv) enter into any agreement with respect
to any of the foregoing.
Fractional Shares. No fractional
shares or scrip representing fractional shares shall be issued upon the conversion of the Series A Preferred Stock. As to any fraction
of a share of Company common stock which a Series A Holder would otherwise be entitled to upon such conversion, the Company will, at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up to the next whole share. Notwithstanding the foregoing, nothing shall prevent any Series A Holder from converting fractional
shares of Series A Preferred Stock.
A copy of the Series A Certificate of Designation
is attached hereto as Exhibit 3.1 and incorporated herein by reference. The foregoing description of the Series A Certificate of Designation
is qualified in its entirety by reference to Exhibit 3.1 attached hereto.