8.	Convertible Debentures

June 26 2020,

we entered into a Securities Purchase Agreement with

two

institutional investors, pursuant to which we received gross proceeds of

$1,050,000

in exchange for the issuance of: (i)

Original Issue Discount Senior Secured Convertible Debentures (the “Convertible Debentures”) in the aggregate principal amount of

$1,200,000;

and (ii)

five

-year warrants (the

“June 2020

Warrants”) to purchase an aggregate of

120,000

shares of our common stock at an exercise price of

$10.00

per share. Net proceeds after deducting the original issue discount, finder's fee and other debt issuance costs was

$888,500.

As a result of the public offering of our securities described in Note

10,

September 29, 2020

the exercise price of the

June 2020

Warrants was reduced to

$5.00.

The Convertible Debentures had an original maturity of

twelve

months, bore interest at a rate of

per annum, and were secured by substantially all of the Company's assets until such time as they were paid or converted in full.

The Convertible Debentures were mandatorily convertible upon our consummation of a public offering of common stock with gross proceeds of

$6,000,000

or more, and which resulted in the listing of our common stock on a national securities exchange (a “Qualified Offering”). The conversion price upon the occurrence of a Qualified Offering was equal to the lower of (i)

$10.00

per share or (ii)

80%

of the offering price. The conversion provisions of the Convertible Debentures were subject to a “conversion blocker” such that each of the purchasers could

not

convert the Convertible Debentures to the extent that the conversion would result in the purchaser and its affiliates holding more than

4.99%

of our outstanding common stock.

September 29, 2020,

upon our consummation of the public offering discussed in Note

10,

the

$1,200,000

maturity value of the Convertible Debentures and

$14,667

of accrued interest were automatically converted at

$4.00,

the Qualified Offering discounted price, resulting in the issuance of

303,667

conversion units. Of the

303,668

conversion units: (a)

177,626

consist of

one

share of common stock and

warrant to purchase

one

share of common stock (a “Conversion Warrant”), and (b)

126,042

consist of

one

pre-funded warrant to purchase

one

share of common stock (a “Pre-Funded Warrant”) and

Conversion Warrant. The Pre-Funded Warrants provide the holder the right to purchase

one

share of Common Stock at an exercise price of

$0.01

per share, are immediately exercisable and will

not

expire until exercised in full. The Unit Warrants provide the holder the right to purchase

one

share of common stock, are immediately exercisable at an exercise price of

$5.00

per share and expire

five

years after the issuance date.

Upon the issuance of the Convertible Debentures, we recorded a debt discount of

$769,334,

including the

$150,000

original issue discount,

$457,834

of fair value allocated to the warrants (recorded as Additional Paid-in Capital), and

$161,500

of direct transaction costs incurred. The debt discount was amortized to interest expense over the

-month term of the Debentures using the effective interest rate method, up to the date of conversion. As a result of the mandatory conversion of the Convertible Debentures on

September 29, 2020,

the remaining unamortized debt discount (

$645,150

) was recorded as Additional Paid-in Capital in the accompanying Consolidated Balance Sheets. Interest expense associated with the Convertible Debentures was

$133,148

and

138,851

for the

three

-month and

nine

-month periods ended

September 30, 2020,

respectively, including of

$119,139

and

$124,184,

respectively, of debt discount amortization.