Subsequent events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent events

16. Subsequent events

On July 13, 2022, we entered into Amendment No. 12 to the Financing Agreement pursuant to which the maturity date of the Financing Agreement was extended to July 24, 2022, and we agreed to pay the Lenders a PIK amendment fee in the amount of $1.2 million.

On July 24, 2022, we entered into Amendment No. 13 to the Financing Agreement pursuant to which the maturity date of the Financing Agreement was extended to July 27, 2022, we agreed to pay the Lenders a payment of accrued and unpaid interest of $2.9 million, and we agreed to retain Jeffrey Varsalone from G2 Capital Advisors as our chief restructuring officer.

On July 27, 2022, we entered into Amendment No. 14 to the Financing Agreement pursuant to which the maturity date of the Financing Agreement was extended to July 28, 2022.

On July 28, 2022, we entered into Amendment No. 15 to the Financing Agreement pursuant to which the maturity date of the Financing Agreement was extended to July 29, 2022.

On July 29, 2022, we entered into a Subscription Agreement (the “Subscription Agreement”) with Rubric Capital Management LP (the “Investor”), pursuant to which we issued and sold, in a private placement offering (the “Offering”), (i) 15,000 shares of the Company’s newly-designated Series A Preferred Stock, par value $0.001 per share (“Preferred Stock”), for a purchase price per share of Preferred Stock equal to $822.21 and an aggregate purchase price of $12.3 million, and (ii) 565,000 shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), for a purchase price per share of Common Stock equal to $4.72 and an aggregate purchase price of $2.7 million. The Subscription Agreement contains customary representations, warranties and agreements by the Company and the Investor. The Offering closed on July 29, 2022 (the “Closing”). We received aggregate gross proceeds of $15.0 million from the Offering, before expenses, and we intend to use the net proceeds from the Offering for working capital and general corporate purposes. The Preferred Stock is not convertible into Common Stock and ranks senior to Common Stock, with respect to rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the Preferred Stock has a liquidation preference equal to $1,333 per share. The Preferred Stock will not have any voting rights other than as required by applicable law. The holders of Preferred Stock are entitled to dividends equal to 25% of cash dividends actually paid, if any, on shares of Common Stock, paid pro rata on the outstanding shares of Preferred Stock. If the Company undergoes certain change of control transactions, the holders of Preferred Stock may require the Company to redeem their shares of Preferred Stock at a redemption price per share of Preferred Stock, payable in cash, equal to the liquidation preference of $1,333 per share of Preferred Stock. We also have the option to redeem the shares of Preferred Stock on such terms if the Company undergoes certain change of control transactions. Each holder of the Preferred Stock has the right to cause the Company to redeem all, but not less than all, of their shares of the Preferred Stock upon the occurrence of certain events, including, without limitation, the Company’s failure to comply with any covenants under the Certificate of Designation filed with the Secretary of State of the State of Nevada or if the Company commences a bankruptcy proceeding, subject to certain conditions. Under such circumstances, the Company is required to redeem all, but not less than all, of the holder’s outstanding shares of Preferred Stock at a redemption price per share of Preferred Stock, payable in cash, equal to the liquidation preference of $1,333 per share. The Preferred Stock matures on December 31, 2022, subject to certain extension terms, as set forth in the Certificate of Designation, and the Company is required to redeem the shares on such date at a redemption price per share of Preferred Stock, payable in cash, equal to the liquidation preference of $1,333 per share.

On July 29, 2022, the Company entered into Amendment No. 16 (“Amendment No. 16”) to the Financing Agreement pursuant to which the maturity date of the Financing Agreement was extended to September 30, 2022, and we will have the option to further extend the maturity date to October 31, 2022, and November 30, 2022, in each case if the Company receives not less than $7.0 million in cash proceeds from an equity issuance, which, if preferred equity, is on substantially the same terms as the Preferred Stock. In lieu of a cash amendment fee, to induce the Lenders to enter into Amendment No. 16, on July 29, 2022, the Company issued warrants (the “Lender Warrants”), to the Lenders to purchase an aggregate of 185,000 shares of Common Stock, pursuant to a subscription agreement by and among the Company and the Lenders (the “Lender Subscription Agreement”). The Lender Warrants have an exercise price of $0.01 per share of Common Stock, subject to certain adjustment as provided therein, and an expiration date of November 26, 2022. The Lender Warrants may also be exercised via cashless exercise pursuant to the terms thereof. No registration rights were issued pursuant to the Lender Warrants or Lender Subscription Agreement.