EQUITY TRANSACTIONS

6 Months Ended

Oct. 31, 2024

Equity [Abstract]

EQUITY TRANSACTIONS

8. EQUITY TRANSACTIONS

The Company is authorized to issue 10,000,000 shares of Preferred Stock, $0.0001 par value. The Board has designated 3,000 shares as Series A Convertible Preferred Stock and 6,000 shares as Series B Convertible Preferred Stock. The rights, preferences, privileges and restrictions on the remaining authorized 9,991,000 shares of Preferred Stock have not been determined. The Board is authorized to create a new series of preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred shares. 

Series A Convertible Preferred Stock

On May 8, 2024, the Company and Orchid entered into a securities purchase agreement (the “Orchid SPA”) for the purchase of up to 2,500 shares of Series A Convertible Preferred Stock and warrants to purchase shares up to 2,000,000 shares of Common Stock in several tranche closings.

On May 10, 2024, the Company sold 100 shares of Series A Convertible Preferred Stock and warrants to purchase 80,000 shares of Common Stock with an exercise price of $12.50, for a total purchase price of $1.0 million. The purchase price was paid by the surrender and cancellation of a term note issued by the Company to Orchid of $311,356, consisting of $310,000 of principal and $1,356 of accrued and unpaid interest, $100,000 discount and net cash of $588,644.

On June 25, 2024, the Company sold 150 shares of Series A Convertible Preferred Stock and warrants to purchase 120,000 shares of Common Stock with an exercise price of $12.50, for a total purchase price of $1.5 million. The purchase price was paid in cash.

On August 19, 2024, the Company sold 200 shares of Series A Convertible Preferred Stock and warrants to purchase 160,000 shares of Common Stock with an exercise price of $12.50 to Orchid, for a total purchase price of $2.0 million. The purchase price was paid in cash.

On August 21, 2024, the Company sold 250 shares of Series A Convertible Preferred Stock and warrants to purchase 200,000 shares of Common Stock with an exercise price of $12.50 to Orchid, for a total purchase price of $2.5 million less $100,000 discount. The purchase price was paid in cash.

On September 11, 2024, the Company sold 100 shares of Series A Convertible Preferred Stock and warrants to purchase 80,000 shares of Common Stock with an exercise price of $12.50 to Orchid, for a total purchase price of $1.0 million. The purchase price was paid in cash.

The Series A Convertible Preferred Stock has a stated value of $1,000 per share and holders of the Series A Convertible Preferred Stock are entitled to cumulative cash dividends at an annual rate of 15%, or $1,500.00 per share (“Dividend Amount”), based on the stated value per share. Notwithstanding the foregoing, for as long as any share(s) of Series A Preferred Stock shall remain outstanding, the Dividend Amount shall be paid either in shares of Series A Preferred Stock or cash, at Orchid’s discretion, in each case equal to the Dividend Amount. Each share of Series A Convertible Preferred Stock is convertible into shares of Common Stock cased on the conversion price (“Series A Conversion Price”), which is defined as (a) the state value of the Series A Preferred Stock being converted pus all accrued but unpaid dividends, divided by (b) the greater of (i) $2.50 per share (“Floor Price”), and (ii) the lesser of (A) $15.00 and (B) 80% of the lowest closing price of the Common Stock during the three trading days immediately prior to the date of the conversion. The Conversion Price is subject to adjustment in the event of an issuance of Common Stock at a price per share lower than the Conversion Price then in effect, but not below the Floor Price. The Floor Price shall, however, be adjusted for stock splits, stock dividends, combinations or similar transactions. The holders of the Series A Convertible Preferred Stock are entitled to vote with the Common Stock as a single class on an as-converted basis, subject to applicable law provisions of the Delaware General Corporation Law and Nasdaq, provided, however, that for purposes of complying with Nasdaq regulations, the conversion price, for purposes of determining the number of votes the holder of Series A Convertible Preferred Stock is entitled to cast, shall not be lower than $5.63 (the “Voting Floor Price”), which represents the closing sale price of the Common Stock on the trading day immediately prior to the execution date of the Orchid SPA. The Voting Floor Price shall be adjusted for stock dividends, stock splits, stock combinations and other similar transactions. Upon a liquidation event, the holders of Series A Convertible Preferred Stock receive a liquidation preference ahead of holders of Common Stock.

Series B Convertible Preferred Stock

On January 31, 2024, the Company and Ault Lending, LLC (“Ault Lending”) entered into a securities purchase agreement (the “AL SPA”) for the purchase of up to 6,000 shares of Series B Convertible Preferred Stock and warrants to purchase shares up to 600,000 shares of the Company’s Common Stock. The AL SPA provides that Ault Lending may purchase up to $6 million of Series B Convertible Preferred Stock in one or more closings. Ault Lending has the right to purchase up to $2 million of Series B Convertible Preferred Stock, on or before March 31, 2024, and the right to purchase up to $4 million of Series B Convertible Preferred Stock after March 31, 2024, but on or before March 31, 2025 (the “Termination Date”). The Agreement will automatically terminate if the final closing has not occurred prior to the Termination Date.

On January 31, 2024, the Company sold 1,220 shares of Series B Convertible Preferred Stock and warrants to purchase 122,000 shares of Common Stock with an exercise price of $12.00, for a total purchase price of $1.22 million. The purchase price was paid by the cancellation of $1.15 million of cash advances made by Ault Lending to the Company between November 9, 2023 and January 31, 2024 and a subscription receivable of $70,000.

On March 26, 2024, the Company sold 780 shares of Series B Convertible Preferred Stock and warrants to purchase 78,000 shares of Common Stock with an exercise price of $12.00, for a total purchase price of $780,000.

On April 29, 2024, the Company sold 100 shares of Series B Convertible Preferred Stock and warrants to purchase 10,000 shares of Common Stock with an exercise price of $12.00, for a total purchase price of $100,000.

The Series B Convertible Preferred Stock has a stated value of $1,000 per share (“Stated Value”) and does not accrue dividends. Each share of Series B Convertible Preferred Stock is convertible into a number of shares of Common Stock determined by dividing the Stated Value by $10.00 (the “Conversion Price”). The Conversion Price is subject to adjustment in the event of an issuance of Common Stock at a price per share lower than the Conversion Price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events. The holders of the Series B Convertible Preferred Stock are entitled to vote with the Common Stock as a single class on an as-converted basis, subject to applicable law provisions of the Delaware General Company Law and Nasdaq, provided, however, that for purposes of complying with Nasdaq regulations, the conversion price, for purposes of determining the number of votes the holder of Series B Convertible Preferred Stock is entitled to cast, shall not be lower than $8.73 (the “Voting Floor Price”), which represents the closing sale price of the Common Stock on the trading day immediately prior to the Execution Date. The Voting Floor Price shall be adjusted for stock dividends, stock splits, stock combinations and other similar transactions. Upon a liquidation event the holders of Series B Convertible Preferred Stock receive a liquidation preference ahead of holders of Common Stock.

The warrants have an exercise price of $12.00 (the “Exercise Price”) and become exercisable on the first business day after the six-month anniversary of issuance (the “Initial Exercise Date”) and have a five-year term, expiring on the fifth anniversary of the Initial Exercise Date. The Exercise Price is subject to adjustment in the event of an issuance of Common Stock at a price per share lower than the Exercise Price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events.

Common Stock

At-the-Market Offering

On October 3, 2024, the Company entered into an At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC (the “ATM Offering”), as sales agent to sell shares of its Common Stock, having an aggregate offering price of up to approximately $6.5 million from time to time, through the ATM Offering. On October 3, 2024, the Company filed a prospectus supplement with the SEC relating to the offer and sale of up to approximately $6.5 million in shares of Common Stock in the ATM Offering.

The offer and sale of the shares will be made pursuant to the Company’s effective “shelf” registration statement on Form S-3 and an accompanying base prospectus contained therein (Registration Statement No. 333-273610) filed with the SEC on August 2, 2023 and declared effective by the SEC on August 10, 2023.

During the six months ended October 31, 2024, the Company sold an aggregate of 755,888 shares of Common Stock pursuant to the ATM Offering for gross and net proceeds of $1.2 million.

Orchid SPA

During the three months ended October 31, 2024, Orchid converted 649.5363 shares of Series A Convertible Preferred Stock into 3,613,951 shares of Common Stock. During the six months ended October 31, 2024, Orchid converted 712.0133 shares of Series A Convertible Preferred Stock into 3,787,284 shares of Common Stock.