NOTE 14—SUBSEQUENT EVENTS

See Note 11 for information relating to our revised API agreement with Telcon which provides target annual revenue of more than US$5,000,000 and annual “profit” (i.e., sales margin) to Telcon of US$2,500,000. The Company’s obligations under the revised API supply agreement are secured by a pledge to Telcon of the Telcon convertible bond purchased by the Company in September 2020 and the proceeds thereof. In February 2022, the Company consented to Telcon’s offset as of February 10, 2022 of KRW3.5 billion, or approximately US$2.9 million, against the principal amount of the Telcon Convertible Bond and release of KRW400 million, or approximately US$310,000 in cash proceeds to Telcon in satisfaction the target shortfalls for the years ended 2020 and 2021. To the extent the annual revenue and “profit” targets provided for in the API supply agreement are not met in 2022 or future years, Telcon may be entitled to payment of the shortfall or offsets against the Telcon convertible bond and other collateral securing the Company’s obligations.

Subsequent to the year ended December 31, 2021, the Company received $1.9 million of proceeds from related-party loans to augment its working capital.