Note 6 – Related Party Line of Credit Agreements

On September 20, 2019, we entered into two separate LOC Agreements (“LOC Agreements”) with DKBK Enterprises, LLC (“DKBK”) and CorLyst, LLC (“CorLyst”, and, together with DKBK, collectively, “Lenders”), both related parties, which provide a revolving commitment of up to $700,000 each ($1.4 million total). Under the LOC Agreements, all funds borrowed bear interest at an annual rate of 8%. The promissory notes issued in connection with the LOC Agreements provide that the Lenders have the right to convert all or any portion of the principal and accrued and unpaid interest into our common stock on the same terms as our 2019 Senior Convertible Notes.

Our Chief Executive Officer (CEO) is also the CEO and Managing Member of both lenders. As of September 30, 2020, DKBK directly held 16,166 shares of our common stock and CorLyst beneficially owned 1,095,649 shares of our common stock. In April and June 2020, we drew $500,000 under the LOC Agreement with DKBK. On July 21, 2020, we drew an additional $200,000, bringing the total amount drawn under the LOC Agreement with DKBK to $700,000.

On October 6, 2020, in connection with the closing of our underwritten public offering, DKBK converted the $700,000 principal amount and related interest outstanding under the LOC Agreement into 199,537 shares of our common stock at a conversion price of $3.60 per share, which, pursuant to the LOC Agreement, is a 10% discount on the underwritten public offering price.