SHARE CAPITAL |
6 Months Ended | ||||||
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Jun. 30, 2025 | |||||||
| Equity [Abstract] | |||||||
| SHARE CAPITAL | NOTE 12 – SHARE CAPITAL
The Company is authorized to issue shares of its $ par value common stock and shares of its $ par value preferred stock. The shares of $ par value preferred stock were comprised of shares authorized and shares issued and outstanding of its Series A convertible preferred stock at June 30, 2025 and December 31, 2024, shares authorized and shares issued and outstanding of its Series B convertible preferred stock at June 30, 2025 and December 31, 2024, shares authorized and shares issued and outstanding of its Series C convertible preferred stock at June 30, 2025 and December 31, 2024, and shares authorized and and shares issued and outstanding of its Series D convertible preferred stock at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, there were and shares of common stock issued and outstanding, respectively.
The share numbers and pricing information in this report have been adjusted to reflect the effects of the following reverse stock splits, which occurred during 2024 and 2025:
Silverback Conversions
During the six months ended June 30, 2025, the Company issued shares of common stock to Silverback Capital Corporation (“SCC”), representing total accounts payable settlements of $4.1 million, resulting in a loss on conversion of $2.6 million.
In April 2025, the Company completed a series of stock conversions with SCC pursuant to the terms of existing convertible instruments. During this period, Silverback converted a significant portion of its holdings into shares of the Company’s common stock.
Debt to Equity Conversions
The conversions occurred over multiple tranches throughout April 2025, during which the Company’s stock price experienced substantial volatility. The trading price of the Company’s common stock ranged from a low of approximately $ to a high of $ during the month. The Company recognized a significant loss on extinguishment of debt of $12.3 million due to the volatility of the Company’s common stock price.
Shares Issuances
On January 10, 2025, the Company entered into two six-month promissory notes with accredited investors in the principal amounts of $617,100 and $123,420. An original issue discount of $117,100 and $23,420 was applied on the issuance date and was paid through the issuance of and shares of the Company’s Series D Convertible Preferred Stock, resulting in net loan proceeds to the Company of $500,000 and $100,000.
On January 10, 2025, the Company authorized the issuance of shares of common stock to a consultant pursuant to the terms of an amendment to a current consulting agreement.
On January 14, 2025, the Company authorized the issuance of shares of Series D Convertible Preferred Stock to seven service providers to the Company and its subsidiaries.
On February 10, 2025, the Company authorized the issuance of shares of common stock to an accredited investor upon the conversion of shares of Series D Convertible Preferred Stock.
On February 10, 2025, the Company authorized the issuance of shares of common stock, valued at $75,000, to a lender for a fee related to a financing agreement.
On February 27, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a second closing notice for the exchange of $55,000 of assigned note portion for shares of the Company’s common stock.
On March 4, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a third closing notice for the exchange of $52,712 of assigned note portion for shares of the Company’s common stock.
On March 5, 2025, the Company authorized the issuance of shares of common stock to an accredited investor upon the conversion of $64,950 due under a promissory note dated September 4, 2024.On March 5, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a fourth closing notice for the exchange of $55,000 of assigned note portion for shares of the Company’s common stock.
On March 10, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a fifth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a sixth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a seventh closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company an eighth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 12, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a nineth closing notice for the exchange of $65,000 of assigned note portion for shares of the Company’s common stock.
On March 13, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a tenth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 17, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company an eleventh closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 18, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a twelfth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 19, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a thirteenth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock. On the same day, the Purchaser sent the Company a fourteenth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On March 24, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a fifteenth closing notice for the exchange of $35,000 of assigned note portion for shares of the Company’s common stock. On the same day, the Purchaser sent the Company a sixteenth closing notice for the exchange of $35,000 of assigned note portion for shares of the Company’s common stock.
On March 26, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a seventeenth closing notice for the exchange of $35,000 of assigned note portion for shares of the Company’s common stock. On the same day, the Purchaser sent the Company an eighteenth closing notice for the exchange of $35,000 of assigned note portion for shares of the Company’s common stock. On the same day, the Purchaser sent the Company a nineteenth closing notice for the exchange of $35,000 of assigned note portion for shares of the Company’s common stock.
On March 28, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a twentieth closing notice for the exchange of $35,000 of assigned note portion for shares of the Company’s common stock.
On March 31, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a twenty-first closing notice for the exchange of $25,000 of assigned note portion for shares of the Company’s common stock. On the same day, the Purchaser sent the Company a twenty-second closing notice for the exchange of $20,000 of assigned note portion for shares of the Company’s common stock.
On April 2, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $28,050.
On April 2, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $28,875.
On April 2, 2025, the Company entered into a second Settlement Agreement and Stipulation (the “ Second Settlement Agreement”) with Silverback Capital Corporation (“SCC”) to settle outstanding claims owed to SCC. Pursuant to the Settlement Agreement, SCC has agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling $4,690,773 (the “Payables”) and will exchange such Payables for a settlement amount payable in shares of common stock of the Company (the “Settlement Shares”). The Settlement Shares shall be priced at 75% of the average of the three lowest traded prices during the five trading day period prior to a share request, which is subject to a floor price of $. The Company agreed to issue SCC shares of Common Stock as a settlement fee.
On April 3, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $29,700.
On April 4, 2025, SCC requested the issuance of shares of Common Stock to SCC, representing a payment of approximately $26,364.
On April 4, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a twenty-third closing notice for the exchange of $72,500 of assigned note portion for shares of the Company’s common stock. The shares under this request were never issued and on April 9, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a revised twenty-third closing notice for the exchange of $99,000 of assigned note portion for shares of the Company’s common stock.
On April 4, 2025, the Company entered into a conversion agreement with a current noteholder, whereby the noteholder agreed to convert all $617,100 of the principal amount owed under its OID Note dated January 10, 2025 into shares of Series D Convertible Preferred Stock.
On April 4, 2025, the Company entered into definitive agreements for the purchase and sale of an aggregate of shares of common stock (or pre-funded warrant in lieu thereof), series A warrants to purchase up to 724,640 shares of common stock and short-term series B warrants to purchase up to 2,173,920 shares of common stock at a purchase price of $ per share of common stock (or per pre-funded warrant in lieu thereof) and accompanying warrants in a private placement priced at-the-market under Nasdaq rules for a total of $2.5 million. The series A warrants and the short-term series B warrants will have an exercise price of $ per share and will be exercisable immediately upon issuance. The series A warrants will expire five years from the date of issuance and the short-term series B warrants will expire eighteen months from the date issuance. The private placement closed on April 8, 2025.
On April 7 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a twenty-third closing notice for the exchange of $60,000 of assigned note portion for shares of the Company’s common stock. The shares under this request were never issued and on April 9, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a revised twenty-fourth closing notice for the exchange of $50,000 of assigned note portion for shares of the Company’s common stock.
On April 8, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 9, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 9, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 9, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On April 10, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 10, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 10, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 10, 2025, the Company authorized the issuance of shares of common stock to an accredited investor upon the conversion of shares of Series D Convertible Preferred Stock.
On April 10, 2025, the Purchaser, pursuant to the Purchase and Exchange Agreement dated November 11, 2024, as amended on February 19, 2025, sent the Company a twenty-fifth closing notice for the exchange of $66,023 of assigned note portion for shares of the Company’s common stock. On the same day, the Purchaser sent the Company a twenty-sixth closing notice for the exchange of $26,192 of assigned note portion for shares of the Company’s common stock. This last closing notice repaid all the note balances currently due.
On April 11, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 13, 2025, the Company received a conversion notice from a current noteholder, whereby the noteholder converted all $107,500 of the amount owed under its OID Note dated January 10, 2025 into shares of Series D Convertible Preferred Stock.
On April 14, 2025, the Company authorized the issuance of shares of common stock, valued at $ per share, to a financier pursuant to the terms of a settlement and conversion agreement.
On April 14, 2025, the Company authorized the issuance of shares of common stock, valued at $ per share, to a lender pursuant to the terms of a settlement and conversion agreement.
On April 14, 2025, Coventry Enterprises converted a portion of their debt into shares of common stock.
On April 15, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a payment of approximately $105,651, plus shares of Common Stock as a settlement fee (a total of shares of Common Stock).
On April 16, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a payment of approximately $406,015.
On April 23, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a payment of approximately $277,400.
On April 24, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a payment of approximately $584,000.
On April 24, 2025, SCC requested the second issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a second payment of approximately $584,000.
On April 25, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a payment of approximately $642,400.
On April 28, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a payment of approximately $700,800.
On May 6, 2025, SCC requested the issuance of shares of Common Stock to SCC pursuant to the Second Settlement Agreement, representing a payment of approximately $715,400.
On May 6, 2025, 1800 Diagonal Lending converted a portion of their debt into shares of common stock.
On May 30, 2025, a lender, pursuant to an OID Note dated November 11, 2024, converted $131,910 of the OID Note into shares of the Company’s common stock. Further, on June 3, 3025, the lender converted the remaining $214,487 balance of the OID Note, including interest, into shares of the Company’s common stock.
Shares Reserved for Issuance Pursuant to Certain Executive Employment Agreements
The Company in connection with its employment agreement with Messrs. Ross, Grau and Lambrecht reserved for issuance shares of its common stock that are convertible under the Series A preferred stock.
LTIP Shares
On April 9, 2025, the Company registered an aggregate of shares of common stock pursuant to the 2021 Long-Term Incentive Plan and the 2025 Stock Incentive Plan.
New Preferred Stock Series and Designations and Reg. A+ Offering
On May 10, 2024, the Company’s board of directors approved the designation of a new Series D Convertible Preferred Stock (the “Series D Designation”). The Series D Designation was filed by the Company with the Secretary of State of Nevada on May 10, 2024, and designated shares of Series D Preferred Stock, $ par value per share. The Series D Preferred Stock has the following rights:
Stated Value. Each share of Series D Preferred Stock has an initial stated value of $.
Conversion at Option of Holder. Each share of Series D Preferred Stock shall be convertible into shares of Common Stock at a fixed ratio of 1:5 ( share of Series D Preferred Stock converts into shares of Common Stock), at the option of the holder thereof, at any time following the issuance date of such share of Series D Preferred Stock at the Company’s office or any transfer agent for such stock. The conversion ratio shall not be adjusted for stock splits, stock dividends, recapitalizations or similar events.
Forced Conversion – If the closing price of the Company’s Common Stock during any ten consecutive trading day period has been at or above $ per share (as adjusted for stock splits, stock dividends recapitalizations and similar events), then the Company shall have the right to require the holder of the Series D Preferred Stock to convert all, or any portion of, the shares of Series D Preferred Stock held by such holder for shares of Common Stock. If the Company elects to cause a forced conversion of the shares of Series D Preferred Stock, then it must simultaneously take the same action with respect to all of the other shares of Series D Preferred Stock then outstanding on a pro rata basis.
Voting Rights. The Series D Preferred Stock has no voting rights relative to matters submitted to a vote of the Company’s stockholders (other than as required by law). The Company may not amend its articles of incorporation or the Series D Designation (whether by merger, consolidation, or otherwise) to materially and adversely change the rights, preferences or voting power of the Series D Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on such matter by holders of the Company’s outstanding shares of Series D Preferred Stock, voting together as a class.
Conversion of Revenue Interest Loan for Preferred Stock Series D and Potential Issuance of Common Stock Equivalents from the Conversion of Series D
On May 13, 2024 the Company and the holder of one of the Revenue Interest Loans entered into a settlement and conversion agreement (“Securities Exchange Agreement”), whereby the Company issued shares of Series D convertible preferred stock as full satisfaction for the revenue participation interest agreement or loan. The Series D convertible preferred stock was purchased at $ per share. Total loan balance and premium payment for inducement for this Revenue Interest Loan on the date of settlement and conversion was $1,000,005. The Series D convertible preferred stock is convertible at the option of the holder into common stock of the Company at a fixed price per share of $1.50 per share.
The Securities Exchange Agreement is intended to be effected as an exchange of securities issued by the Company pursuant to Section 3(a)(9) of the Securities Act. For the purposes of Rule 144, the Company acknowledges that the holding period of the Securities Exchange Agreement (and upon conversion thereof, if any, into shares of the Company’s common stock) may be tacked onto the holding period of the Series D Preferred Stock received by the holder. The Company agrees not to take a position contrary to this unless required by regulatory authorities and their determination to the contrary.
On July 10, 2024, the Company entered into a separately negotiated Conversion Agreement (the “Conversion Agreement”) with the Series D convertible preferred stock holder, pursuant to which the holder agreed to convert the shares of Series D convertible preferred stock it held into shares of common stock, par value $ per share, of the Company. The shares of common stock underlying the Series D convertible preferred stock was reduced and repriced from $ per share to $ per share (which this price represents the closing price for the Company’s common stock on NASDAQ for the day immediately preceding the date of the Conversion Agreement).
Refer to Note 8 – Notes Payable – Working Capital, for additional information regarding the settlement of debt liabilities through the issuances of Series D Preferred Stock, common stock, pre-funded warrants and convertible notes during the six months ended June 30, 2025.
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