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CAPITAL STOCK
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
CAPITAL STOCK

NOTE 14 - CAPITAL STOCK

 

Reverse Stock Split

 

On June 6, 2025, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of all outstanding shares of its Common Stock, $0.0001 par value per share.

 

All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented.

 

Capital Contributions

 

During the three months ended March 31, 2026 and 2025, the Company’s controlling shareholder made capital contributions of $nil and $500,000, respectively. These cash contributions were made to support the working capital needs of the Company and were made prior to the completion of the Share Exchange.

 

ELOC Agreement

 

On July 10, 2025, the Company entered into the ELOC Agreement with an institutional investor (“ELOC Investor”), providing for a 24-month committed equity financing facility, pursuant to which the ELOC Investor has committed to purchase, at the Company’s direction in its sole discretion, up to an aggregate of $100,000,000 of Common Stock, subject to certain limitations set forth in the ELOC Agreement.

 

The purchase price per share is equal to 96% of the lowest daily volume-weighted average price during a specified measurement period following each purchase notice. The Company may issue up to 10,000,000 shares of Common Stock (exclusive of the commitment shares issued pursuant to the ELOC Agreement described below) under the ELOC, subject to a (i) 9.99% beneficial ownership cap, and (ii) a 19.99% exchange cap, unless shareholder approval is obtained or sales are made at or above the minimum price as defined by NYSE American rules.

 

As consideration for the ELOC Investors commitment, the Company agreed to issue a total of 300,000 shares of Common Stock as a commitment fee, consisting of 156,000 shares of Common Stock issued at closing and 144,000 shares of Common Stock issued upon the effectiveness of the registration statement registering all shares of Common Stock issuable pursuant to the ELOC. The value of these shares at the time of issue was $3,342,000. This amount has been recognized in the statement of operations for the year ended December 31, 2025. The Company also entered into a registration rights agreement requiring it to file and maintain an effective resale registration statement for such shares issued under the ELOC.

 

The ELOC Agreement may be terminated by the Company at any time after commencement, provided the commitment fee and legal fees have been paid. The agreement automatically terminates upon the earlier of (i) full drawdown, (ii) expiration of the 24-month term, (iii) delisting, or (iv) bankruptcy events.

 

The Company engaged Univest Securities LLC as a placement agent and agreed to pay a cash fee equal to 1.5% of the gross funding amount for each drawdown.

 

During the three months ended March 31, 2026, the Company issued 868,000 shares of Common Stock under the ELOC Agreement, for proceeds of $2,569,097.

 

Shares Issued for Cash Consideration

 

On February 23, 2026, the Company closed an offering pursuant to a Securities Purchase Agreement (the “Purchase Agreement”), entered into on February 19, 2026, with a certain institutional investor (the “Investor”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investor (the “Offering”), (i) 4,134,175 shares (the “Shares”) of common stock, par value $0.001 per share, of the Company (“Common Stock”) and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 1,800,543 shares of Common Stock at an exercise price equal to $0.001 per share. The Company received net proceeds of $18,388,199 in respect of this Offering.

 

Exercise of Pre-Funded Warrants

 

On March 17, 2026, the Investor referred to in the Offering above, exercised the 1,800,543 Pre-Funded Warrants they received in the Offering. Accordingly, 1,800,543 shares of Common Stock were issued for proceeds of $1,801.

 

 

Disputed Placement Agent Fees

 

As further discussed in Note 13 Commitments and Contingencies above, effective March 24, 2026, the Company paid $400,000 in disputed placement agent fees in respect of the sale of stock in the prior year and has recorded in additional paid-in capital.