Note 10 – Stockholders Equity

Successor

Preferred Stock

The Company is authorized to issue 5.0 million shares of preferred stock, par value $0.001 as of December 31, 2020. No shares of preferred stock were issued or are outstanding as of December 31, 2020 and 2019.

Common Stock

The Company has authorized 67.5 million shares of common stock, $0.001 par value per share as of December 31, 2020, of which 60.0 million shares are designated as Class A Common Stock and of which 7.5 million are designated as Class B Common Stock. Both classes of common stock qualify for and share equally in dividends, if declared by the Company’s Board of Directors. In the event of liquidation, dissolution, distribution of assets or winding-up of the Company, the holders of both classes of common stock have equal rights to receive all the assets of the Company, after rights of the holders of the preferred stock, if any, have been satisfied.

Class A Common Stock

Holders of Class A Common Stock are entitled to one vote per share on matters to be voted upon by stockholders. Holders of Class A Common Stock have no preemptive rights to subscribe for or to purchase any additional shares of Class A Common Stock or other obligations convertible into shares of Class A Common Stock which the Company may issue in the future.

All of the outstanding shares of Class A Common Stock are fully paid and non-assessable. Holders of our Class A Common Stock are not liable for further calls or assessments.

During the year ended December 31, 2020, the Company entered into separate subscription agreements with certain accredited investors, pursuant to which the Company, in private placements, issued and sold to the accredited investors an aggregate of 673,751 shares of its Class A Common Stock, at an offering price of $11.00 per share, for gross proceeds to the Company of $7.4 million and net proceeds of $7.1 million.

In December 2019, the Company entered into separate subscription agreements with certain accredited investors, pursuant to which the Company, in a private placement, issued and sold to the accredited investors an aggregate of 182,335 shares of its Class A Common Stock, at an offering price of $11.00 per share, for gross proceeds to the Company of $2.0 million.

In October 2019, the Company entered into a separation agreement with the Company’s Chief Executive Officer, (the “Former Executive”), pursuant to which the Former Executive agreed to (a) convert the 40,599 shares of Class B Common Stock of the Company beneficially owned by the Former Executive into 40,599 shares of Class A Common Stock, and (b) cancel all warrants to purchase common stock beneficially held by the Former Executive.

As of December 31, 2020 and 2019, there are 2,416,866 and 1,683,691 shares of Class A Common Stock outstanding, respectively.

Class B Common Stock

Holders of Class B Common Stock are entitled to fifty votes per share on matters to be voted upon by stockholders. Holders of our Class B Common Stock are entitled to elect, exclusively and as a separate class, three of the Company’s Board of Directors, who may not be removed without cause without the affirmative vote of holders of a majority of the outstanding shares of Class B Common Stock, voting as a separate class.

Holders of the Class B Common Stock may, at any time, convert their Class B Common Stock into one share of Class A Common Stock. The Class B conversion ratio is subject to adjustments upon the occurrence of certain events.

As described above, in October 2019, the Company entered into a separation agreement with the Former Executive, pursuant to which the Former Executive agreed to convert the 40,599 shares of Class B Common Stock of the Company beneficially owned by the Former Executive into 40,599 shares of Class A Common Stock.

As of December 31, 2020 and 2019, there are 81,198 shares of Class B Common Stock outstanding.

Warrants

As of December 31, 2020, the Company’s outstanding warrants are as follows:


	Outstanding as of
	December 31, 2020	Exercise Price		Expiration Date
Class W‑1 Warrant	1,125,000	$	12.50	September 25, 2028
Class W‑2 Warrant	1,125,000	$	15.00	September 25, 2028

The Class W‑1 and Class W‑2 warrants, (together, the “Warrants”) were issued by the Successor Company and are fully vested and will become exercisable on September 25, 2023, except in the event of a change in control, or termination without cause, as defined in the respective warrant agreements.

The Warrants are subject to anti-dilution adjustments in connection with stock splits, tender offers, and certain other events (as described in the respective warrant agreements), and (y) provide for a right for the holders of the Warrants to choose to require that the Warrants be assumed by a successor entity or that the holder of Warrants receive the same consideration as stockholders upon certain change in control events.

A summary of warrant activity during the Successor period October 4, 2019 through December 31, 2020 is as follows:



				Weighted average
				remaining contractual life
	Warrants	Weighted exercise price		(in years)
Outstanding as of October 4, 2019	3,150,000	$	13.75	9.0
Forfeited	(900,000)		13.75	—
Outstanding as of December 31, 2019	2,250,000	$	13.75	8.7
Forfeited	—		—	—
Outstanding as of December 31, 2020	2,250,000	$	13.75	7.7
Exercisable	—	$	—

Predecessor

Prior to the Business Combination there were 600 issued and outstanding shares of ANC Green Solutions, Inc.I.