CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with related persons are governed by our Code, which applies to all of our directors, officers and employees. This code covers a wide range of potential activities, including, among others, conflicts of interest, self-dealing and related party transactions. Waiver of the policies set forth in this code will only be permitted when circumstances warrant. Such waivers for directors and executive officers, or that provide a benefit to a director or executive officer, may be made only by our Board, as a whole, or the Audit Committee. Absent such a review and approval process in conformity with the applicable guidelines relating to the particular transaction under consideration, such arrangements are not permitted. All related party transactions for which disclosure is required to be provided herein were approved in accordance with our Code.
Amended and Restated Investor Purchase Agreement
On February 18, 2025, the Company entered into, and simultaneously closed the transactions under, the Amended and Restated Securities Purchase Agreement (“Investor Purchase Agreement”) among Cao Yu, Hu Bin, and Youxin Consulting Limited, a Hong Kong company (collectively, the “Investor Purchasers”), David Lazar and the Company, whereby Mr. Lazar sold to the Investor Purchasers (i) 2,219,447 shares of his Series A Convertible Preferred Stock, (ii) certain warrants, and (iii) 2,656,980 shares of Common Stock and 85,910 shares of Series A Convertible Preferred Stock. The Investor Purchasers also purchased certain receivables that the Company owed to Mr. Lazar. The purchase price was $500,000. As further consideration, Mr. Lazar had the opportunity to be paid by the Investor Purchasers an additional $3,400,000, less any indemnity and other obligations payable by Mr. Lazar, and a number of newly issued shares of Common Stock equal to 3% of the then-outstanding shares of Common Stock, in each case upon the Company satisfying certain Nasdaq Listing Rules on or before December 31, 2025. The Investor Purchase Agreement also included a covenant that the Company would amend its certificate of incorporation to increase the Stated Value of Series A Convertible Preferred Stock from $1.40 to $2.75 in consideration for cancelling certain warrants held by Mr. Lazar and forgiving the receivables owed to him.
Cao Yu Securities Purchase Agreement
On May 9, 2025, the Company entered into, and simultaneously closed the transactions under, a Securities Purchase Agreement with Cao Yu, whereby the Company sold 1,585,366 shares of Common Stock to Cao Yu, for an aggregate purchase price of $2,600,000.
Hu Bin Securities Purchase Agreement
On May 9, 2025, the Company entered into, and simultaneously closed the transactions under, a Securities Purchase Agreement with Hu Bin, whereby the Company sold 853,659 shares of Common Stock to Hu Bin, for an aggregate purchase price of $1,400,000.
Second Amended and Restated Investor Purchase Agreement and Convertible Note
On May 9, 2025, the Company entered into a Second Amended and Restated Investor Purchase Agreement with Mr. Lazar and the Investor Purchasers to remove references to certain rescinded share issuances and replace them with the Convertible Note described below, and to remove references to certain earnout shares; the Investor Purchasers also agreed to surrender certain warrants held by Mr. Lazar for cancellation and to waive and forgive certain receivables owed to him for the benefit of the Company. On May 9, 2025, the Company and Mr. Lazar entered into an unsecured promissory note (the “Convertible Note”), under which, effective as of February 18, 2025, the Company agreed to pay Mr. Lazar a principal amount of $300,000, together with interest, due on or before December 31, 2025. On October 27, 2025, following Company stockholder approval, the Convertible Note automatically converted into 1,235,814 shares of Common Stock at a conversion price of $0.25 per share.
Lazar Services Agreement
On May 9, 2025, the Company entered into a services agreement with Mr. Lazar (“Service Provider”), pursuant to which the Company engages Service Provider as an independent contractor, to (i) use best efforts to obtain a decision from the SEC that Nasdaq must hold a hearing to consider the merits of the Company’s appeal from being delisted from Nasdaq, (ii) use best efforts to achieve a Nasdaq Listing for the Company on or before December 31, 2025 (such date of achievement being the “Listing Date”) and (iii) continue to provide additional services to the Company in furtherance of achieving a Nasdaq Listing through the earlier of December 31, 2025, or the Listing Date.
