Note 19 - Subsequent Events |
3 Months Ended |
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Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Subsequent Events [Text Block] |
Note 19. Subsequent Events
Reverse Stock Split
On April 15, 2026, the shareholders of the Company approved a proposal to amend the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split. The proposal allows but does not require the Board to effect a reverse stock split of the Company’s common stock at a reverse stock split ratio of not less than 1-for-2 and not greater than 1-for-100. The Board has not yet effected this reverse stock split.
Issuance of Series D Convertible Preferred Stock
On April 20, 2026, in connection with the Company’s acquisition of FLYTE, the Company issued 5,250 and 5,778 shares of its newly designated Series D Convertible Preferred Stock, par value $0.0001 per share and stated value of $1,000 per share to SEG Jets and Creatd, respectively.
Subject to certain limitations described below, the Series D Preferred Stock are convertible into shares of the Company's common stock at the option of a holder at an initial conversion price of $1.1038 per share, subject to adjustment in certain circumstances as set forth in the Certificate of Designations. Following the date on which the registration statement filed pursuant to the related registration rights agreement is first declared effective by the Securities and Exchange Commission (the "Effective Date”), the conversion price shall be reduced to equal the lower of (i) the conversion price in effect immediately prior to the Effective Date and (ii) the Applicable Price on the Effective Date. In each case, the conversion price if subject to a floor price of $0.35, unless waived by the Company in its sole discretion. In the event of a stock dividend, reverse stock split, stock combination, reclassification or similar event affecting the Company’s common stock, the conversion price shall be adjusted based on the number of shares of common stock outstanding immediately before and after such event. The conversion of the Series D Convertible Preferred Stock is subject to stockholder approval and certain beneficial ownership limitations. Prior to the Stockholder Approval Date, the Series D Convertible Preferred Stock may only be converted into shares of common stock up to the maximum amount permitted under applicable exchange rules.
Notwithstanding the foregoing, the holders of shares of Series D Convertible Preferred Stock do not have the right to convert any portion of their Series D Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own a number of shares of common stock in excess of 4.99% of the shares of common stock then outstanding (the “Beneficial Ownership Limitation”). At the holder’s option, the holder may increase the Beneficial Ownership Limitation to 9.99% of the shares of common stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.
Holders of Series D Convertible Preferred Stock are entitled to receive dividends when and as declared by the Board of Directors, in its sole discretion, on the stated value of such shares. In addition, upon certain rights offerings or other distributions to holders of common stock, the holders of Series D Convertible Preferred Stock are entitled to participate on an as-if-converted-to-common-stock basis, in each case subject to the Beneficial Ownership Limitation and applicable issuance limitations.
Upon any liquidation, dissolution or winding-up of the Company, the holders of Series D Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution to holders of Junior Securities, an amount equal to the stated value of such shares, plus any accrued and unpaid dividends thereon, if any, and any other fees or liquidated damages then due and owing.
In the event of certain fundamental transactions, upon any subsequent conversion of the Series D Convertible Preferred Stock, the holders will be entitled to receive, for each share of common stock that would otherwise have been issuable upon conversion immediately prior to such transaction, the same kind and amount of securities, cash or other property that would have been received by a holder of common stock, and the conversion price will be adjusted accordingly.
Except as otherwise required by law, and subject to certain protective provisions, the Series D Convertible Preferred Stock do not have voting rights.
Issuance of Series C-2 Convertible Preferred Stock
On April 21, 2026, pursuant to the Securities Purchase Agreements dated February 6, 2026 and March 9, 2026, the Company issued an aggregate of 3,470 shares of the Company’s newly designated Series C-2 Convertible Preferred Stock, par value $0.0001 per share and stated value of $1,000 per share.
Subject to certain limitations described below, the Series C-2 Convertible Preferred Stock is convertible into shares of the Company’s common stock at the option of the holder at an initial conversion price of $0.883 per share, subject to adjustment in certain circumstances as set forth in the Certificate of Designations. Following the date that the registration statement filed pursuant to the related registration rights agreement is first declared effective by the Securities and Exchange Commission (the “Effective Date”), the conversion price is reduced to the lower of (i) the conversion price in effect immediately prior to the Effective Date and (ii) 80% of the Applicable Price on the Effective Date. In each case, the conversion price is subject to a floor price of $0.35, unless waived by the Company in its sole discretion. In the event of a stock dividend, reverse stock split, stock combination, reclassification or similar event affecting the Company’s common stock, the conversion price shall be adjusted based on the number of shares of common stock outstanding immediately before and after such event. The conversion of the Series C-2 Convertible Preferred Stock is subject to stockholder approval and certain beneficial ownership limitations. Prior to the Stockholder Approval Date, the Series C-2 Convertible Preferred Stock may only be converted into shares of common stock up to the maximum amount permitted under applicable exchange rules.
Notwithstanding the foregoing, the holders of shares of Series C-2 Convertible Preferred Stock do not have the right to convert any portion of their Series C-2 Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own a number of shares of common stock in excess of 4.99% of the shares of common stock then outstanding (the “Beneficial Ownership Limitation”). At the holder’s option, the holder may increase the Beneficial Ownership Limitation to 9.99% of the shares of common stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.
Holders of Series C-2 Convertible Preferred Stock are entitled to receive dividends when and as declared by the Board of Directors, in its sole discretion, on the stated value of such shares. In addition, upon certain rights offerings or other distributions to holders of common stock, the holders of Series C-2 Convertible Preferred Stock are entitled to participate on an as-if-converted-to-common-stock basis, in each case subject to the Beneficial Ownership Limitation and applicable issuance limitations.
Upon any liquidation, dissolution or winding-up of the Company, the holders of Series C-2 Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution to holders of Junior Securities, an amount equal to the stated value of such shares, plus any accrued and unpaid dividends thereon, if any, and any other fees or liquidated damages then due and owing.
In the event of certain fundamental transactions, upon any subsequent conversion of the Series C-2 Convertible Preferred Stock, the holders will be entitled to receive, for each share of common stock that would otherwise have been issuable upon conversion immediately prior to such transaction, the same kind and amount of securities, cash or other property that would have been received by a holder of common stock, and the conversion price will be adjusted accordingly.
Except as otherwise required by law, and subject to certain protective provisions, the Series C-2 Convertible Preferred Stock do not have voting rights.
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