18.EQUITY 

On June 14, 2024, the SEC qualified an offering of securities submitted by the Company under Regulation A (the “2024 Reg A Offering”). Under the 2024 Reg A Offering, the Company proposed to sell up to 3,333,333 shares (“Shares”) at a price of $6.00 per Share, and up to 4,852,224 shares of common stock underlying warrants (“Warrant”) issued in the Company’s 2021 Reg A Offering, exercisable at a price of $4.50 per Warrant.

The registration statement for the Company’s Initial Public Offering was declared effective on October 9, 2024. On October 10, 2024, the Company consummated the Initial Public Offering of 1,118,005 common shares priced at $6.00 per share, generating gross proceeds of $6,708,030.

Concurrently with the closing of the Initial Public Offering, all 369,331 series B preferred shares were automatically converted to common shares pursuant to the series A preferred certificate of designation which became effective on October 10, 2024, in connection with the NASDAQ listing. On October 7, 2024, the Company and JPMorgan Chase Funding Inc. (“JPM”) entered into an agreement for the redemption of one share of series A preferred stock by JPM pursuant to the series A preferred certificate of designation which became effective on October 10, 2024 in connection with the NASDAQ listing. As such there are no preferred shares outstanding as of December 31, 2024.

Following the closing of the IPO on October 10, 2024, an amount of $249,008 from the net proceeds of the sale of the commons shares in the Initial Public Offering was placed in a trust account (“Trust Account”) as a chargeback reserve which may be released in 90 days from the closing of the IPO.

Transaction costs of the Initial Public Offering amounted to $1,064,010, consisting of $579,647 of underwriting fee, and $484,363 of other offering costs.

During the year ended December 31, 2024, the Company issued 2,246,256 shares of common stock for acceptance of share subscriptions and conversion of debt, amounting to $6,322,845, net of offering costs of $2,061,665. See Note #15.

During the year ended December 31, 2023, the Company issued 98,334 shares of common stock for acceptance of share subscriptions and conversion of debt, amounting to $111,377, net of offering costs of $0.

During year ended December 31, 2023, the Company issued 246,020 shares of series B preferred stock for acceptance of share subscriptions amounting to $140,123, net of offering costs of $473,126.

During year ended December 31, 2024, the Company issued 123,200 shares of series B preferred stock for acceptance of share subscriptions amounting to $308,000, net of offering costs of $40,874. On October 7, 2024 the Company and JPMorgan Chase Funding Inc. (“JPM”) entered into an agreement for the redemption of one share of series A preferred stock by JPM pursuant to the series A preferred certificate of designation which became effective on October 10, 2024 in connection with the NASDAQ listing. All 369,331 series B preferred shares were automatically converted to common shares pursuant to the series A preferred certificate of designation which became effective on October 10, 2024, in connection with the NASDAQ listing. As such there are no preferred shares outstanding as of December 31, 2024.

For the years ended December 31, 2024 and 2023, the Company incurred equity issuance costs of $2,102,539 and $473,126, respectively. These costs consisted of legal, marketing, accounting, printing, administration, broker-dealer, escrow and filing fees directly related to their respective offerings.

On September 29, 2021, the SEC qualified an offering of securities submitted by the Company under Regulation A (the “2021 Reg A Offering”). Under the 2021 Reg A Offering, the Company proposed to sell up to 5 million units (“Units”) at a price of $3.75 per Unit (as adjusted for the Company’s 1 for 3 reverse split completed in April 2024). Each Unit was comprised of one share of common stock (an “Offering Share”) and one warrant to purchase an additional share (an “Offering Warrant”) at an exercise price of $7.50 per share for a period of three years from the date of issuance of the warrant. The Company reserved from treasury a maximum of 5,000,000 Shares issuable under the 2021 Reg A Offering, assuming full subscription, and a maximum of 1,666,667 shares issuable on exercise of the Offering Warrants (“Warrant Shares”) issued in connection with the 2021 Reg A Offering, assuming full subscription and full exercise. The Company did not issue Unit certificates but instead issued Offering Shares and Offering Warrants in the number of Units subscribed for to subscribers under the 2021 Reg A Offering. The Reg A Offering closed on September 29, 2022, with total gross proceeds of $18,195,838.

The table below sets forth the shares reserved as of December 31, 2024, by the Company for future potential issuance.

As of December 31, 2024, the Company had issued and outstanding a total of 7,975,499 warrants each to purchase one share of common stock, exercisable at a range from $0.83 to $7.50 per share for cash and a range length of time to exercise from 0.5 to 5 years.

As of December 31, 2024 and 2023, the Company has share purchase warrants issued and outstanding of 7,975,499 and 5,599,079, respectively.

On June 14, 2024, the Company entered into an engagement agreement with Digital Offering, LLC to provide broker-dealer services in connection with the 2024 Reg A Offering. Under the terms of the engagement letter, the Company will issue a warrant to purchase one share of the Company’s common stock (an “Agent Warrant”) equal to 2.30% of the total Shares sold to investors under the offering at an exercise price of $7.50 per share and subject to transfer, lock-up and exercise restrictions as set forth in Rule 5110 of the Financial Industry Regulatory Authority, Inc (“FINRA”), as applicable. The 2024 Reg A Offering closed on October 9, 2024 and 25,714 Agent Warrants were issued to Digital Offering, LLC in connection with its services under the 2024 Reg A Offering.