Equity Transactions |
3 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Equity Transactions | |
| Equity Transactions | Note 11. Equity Transactions
Convertible Preferred Stock
The Company has 150,000 shares of preferred stock issued and outstanding to Allan Marshall, CEO. The preferred stock is convertible into 138,889 shares of the Company’s common stock at the holder’s option, has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock.
Common Stock
During the three months ended September 30, 2026, the Company issued the following shares of common stock:
In connection with the settlement of restricted stock units, 327,500 shares of common stock were issued.
In connection with the Company’s at-the-market offering program, the Company issued 8,848,599 shares of common stock for aggregate gross proceeds of approximately $10.1 million and net proceeds of approximately $9.8 million.
In connection with the advisory services agreement with Hivemind Capital Partners, LLC ("Hivemind"), the Company issued 550,000 shares of common stock with an aggregate grant-date fair value of approximately $0.5 million as an advance payment for advisory services.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance included in ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815. Warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance, or when the conditions for equity classification are met, and are not remeasured. Warrants that do not meet the required criteria for equity classification are classified as liabilities.
The Company evaluated the warrants and concluded that they met the criteria to be classified within stockholders’ equity within additional paid-in-capital. The warrants are equity classified because they (1) are freestanding financial instruments that are legally detachable and separately exercisable from the common stock, (2) are immediately exercisable, (3) do not embody an obligation for the Company to repurchase its shares, (4) permit the holder to receive a fixed number of shares of common stock upon exercise, (5) are indexed to the Company's common stock and (6) meet the equity classification criteria. As of September 30, 2026, the Company had 3,289,474 warrants outstanding related to the November 2025 private placement offering, 6,337,000 warrants outstanding related to the February 2026 registered direct offering, 6,992,300 pre-funded warrants outstanding related to the June 2026 private placement offering, and an additional 168,134 warrants outstanding related to various prior period issuances. |