NOTE 14 - SUBSEQUENT EVENT

Elimination of Chief Operating Officer Position

On October 10, 2023, the Company eliminated the position of Chief Operating Officer, and terminated Stephanie Davis, the Company’s Chief Operating Officer, from that position. The responsibilities of the Chief Operating Officer will be assumed by other members of management.

Warrants Granted to GLV Ventures

On October 11, 2023, the Company entered into an amendment (the “Amendment”) to its Stag development and Stag supplier agreements with GLV Ventures (“GLV”). Pursuant to the Amendment, GLV agreed to provide the Company with extended payment terms and provide the Company with credit against new vehicles for the value of certain parts purchased by the Company. In consideration for entering into the Amendment No. 1, the Company agreed to issue GLV (or its designee) five-year warrants to purchase 400,000 shares of Company common stock with an exercise price of $2.10 per share, which was equal to the closing price of the Company's common stock on the date of the Amendment No. 1, 200,000 shares were fully vested upon issuance and the remaining warrants will vest 45 days from the issuance date.

Reverse Stock Split

On October 13, 2023, the Company completed a reverse 1 for 5 stock split effective at 4:01pm U.S. Eastern Standard Time. Any fractional shares as a result of the reverse stock split were rounded up to one full share of common stock. As discussed in Note 6, the conversion price of New Notes and Exchange Notes and exercise price of the New Warrants and Exchange Warrants were subject to adjustment to the lowest day’s VWAP in the five days following the reverse split, which was $1.369 per share. Total shares issuable for the New Notes and Exchange Notes based on this adjusted price would be 23,454,124.

Warrant Inducement

On October 13, 2023, the Company entered into an inducement offer letter agreement (the “Inducement Letter”) with the three holders (each, a “Holder”) of the May 2023 Warrants. The Company reduced the exercise price of up to 973,000 to the lesser of (i) $1.75 (after giving effect to the 1:5 reverse stock split that went into effect on October 13, 2023) and (ii) the exercise price in effect at the time of exercise of the Existing Warrants if further adjusted in accordance with the terms of the May 2023 Warrants ($1.369 per share after adjustment for the lowest day’s VWAP for the five days following the reverse stock split). The reduction of the exercise price of such Existing Warrants will remain in effect until October 27, 2023 (the “Inducement Period”). Any Warrants not exercised prior to the end of the Inducement Period be $1.369 (after given effect to the 1:5 reverse stock split and lowest day’s VWAP for the five days following the reverse stock split) as adjusted pursuant to other events that would result in a change in the exercise price under the original terms of the Existing Warrants.

In addition, pursuant to the Inducement Letter, the Holders who exercise such Existing Warrants for cash on or prior to October 27, 2023 would receive a new warrant (“Reload Warrant”) to purchase a number of shares of common stock equal to the number of shares of common stock exercised under the Existing Warrants. The exercise price of the Reload Warrants was determined based on the terms of the Existing Warrants, which was $1.369 per share.

On October 20, 2023, the Holders exercised 105,000 warrants at $1.369 per share.

On October 29, 2023, in an effort to raise cash, the Company entered into an inducement offer letter agreement (the “Inducement Reprice Letter”) with the Holders of the Company’s May 2023 Warrants. Pursuant to the Inducement Reprice Letter, in exchange for an aggregate cash payment of $346,500, the Company reduced the exercise price with respect to May 2023 Warrants exercisable into an aggregate of 350,000 shares of common stock from $1.369 per share to $0.01 per share.