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EQUITY | 3 Months Ended
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Mar. 31, 2023
Equity [Abstract] |
EQUITY | EQUITY Issuance of Registered Shares of Common Stock On February 13, 2023, we entered into an equity purchase agreement (“2023 Leviston Sales Agreement”) with Leviston Resources LLC (“Leviston”) to offer and sell registered shares of common stock at an aggregate offering price of up to $10 million from time to time, at our option, on terms we deem favorable. As of March 31, 2023, the Company issued 2,875,677 registered shares of common stock to Leviston pursuant to the Company’s Form S-3 filed with the U.S. Securities and Exchange Commission, for an aggregate sales price of $800,000 at an average price per share of $0.28, and additional 552,486 common shares at a fair value of $200,000 in commitment fees. As of March 31, 2023, the 2023 Leviston Sales Agreement has $4,200,000 of remaining capacity. On December 16, 2022, the Company entered into a securities purchase agreement for an unsecured convertible promissory note ("Convertible Note") with Ionic Ventures, LLC. The Convertible Note contains conversion terms that are based on percentages of trading price and volumes over defined measurement periods. (See Note 8, Debt Obligations) On June 21, 2022, we entered into an agreement for the purchase of up to $10,000,000 worth of shares of the Company’s common stock from time to time, at the Company’s option. Any shares offered and sold to Tysadco will be registered for resale pursuant to a registration statement on Form S-1 filed with U.S. Securities and Exchange Commission pursuant to the Securities Act of 1933 (the “Securities Act”). The Company will pay commissions equal to 5% of the offering proceeds to the placement agent in connection with any such sale. In consideration to enter the Purchase Agreement, the Company delivered 428,571 additional shares of common stock with a fair value of $300,000 to Tysadco. For the year ended December 31, 2022, the Company issued 3,433,634 shares of common stock to Tysadco, for an aggregate sales price of $1,100,000 at an average price per share of $0.32. During the first quarter of 2023, the Company issued 3,214,599 shares of common stock to Tysadco, for an aggregate sales price of $1,350,000 at an average price per share of $0.42. Sales of common stock, if any, under the Purchase Agreement are made at a 10% discount to the volume weighted average sales price of the common stock on the date that Tysadco receives a capital call from the Company. Issuance (Cancellation) of Unregistered Shares of Common Stock On February 14, 2023, the Company issued 410,959 shares of unregistered restricted common stock with a fair value of $150,000 to Leviston as payment for due diligence fees under the 2023 Leviston Sales Agreement. There were no issuance of unregistered shares of our common stock in connection with acquisitions, investment and other endeavors during the three months ended March 31, 2022. On February 28, 2022, the Company and the other parties to the LP Biosciences transactions mutually agreed to terminate the Transaction Documents. In connection with the termination, 3,500,000 restricted shares of the Company’s common stock were transferred back to the Company for cancellation upon receipt. Noncontrolling Interest On December 30, 2021, we entered into an agreement with LINICO to purchase additional shares resulting in approximately 90% controlling interest. The remaining 10% ownership was held by AQMS (See Note 17, Related Party) and is accounted for as a noncontrolling interest in our condensed consolidated financial statements. During the three months ended March 31, 2022, the Company and AQMS made $1,140,000 and $500,000, respectively, in additional investments to LINICO. For the three months ended March 31, 2023, the Company and AQMS did not make additional investments in LINICO. As of March 31, 2023 and December 31, 2022, we own 88.22% and 88.21%, respectively, of LINICO and AQMS owns 11.78% and 11.79%, respectively. Losses attributable to the non-controlling interest for the three months ended March 31, 2023 and 2022 were $12,805 and $168,468, respectively. LINICO is required pay dividends to the Company and AQMS after the date it receives cash payment in full for the issuance of any shares of Series A Preferred Stock or Series A-2 Preferred Stock, and from and after the date of issuance of any shares of Series A-1 Preferred Stock or Series A-3 Preferred Stock, at the rate per annum of eight percent 8% of the Original Issue Price of such shares, plus the amount of previously accrued and unpaid dividends. As of March 31, 2023 and December 31, 2022, accrued dividends of $311,220 and $169,248, respectively, were due to AQMS and are included in accrued liabilities on the condensed consolidated financial statements. In March 2022, the $500,000 capital contribution from AQMS was invested in LINICO through the exercise of Series A preferred stock warrants which decreased the Company’s ownership in LINICO by 2.01% from 90.34% to 88.33%. The ownership percentage change did not result in a change in control and the Company retained and maintained control of LINICO. The decrease in ownership percentage resulted in a reduction to the Company's additional paid in capital of $176,695 as of March 31, 2022 reflected in our condensed consolidated statement of changes in stockholders' equity. Treasury Stock At March 31, 2023 and December 31, 2022, our treasury stock includes 2,605,323 shares of our common stock with carrying value of $3,360,867. During 2022, we sold 394,677 shares of treasury stock with a carrying value of $509,113 for gross proceeds of $240,077. The difference of $269,056 was recognized as a deduction to additional paid in capital. The shares were acquired with our acquisition of LINICO on December 30, 2021 and are carried at cost and presented as a deduction to equity. No sales of treasury stock were made for the three months ended March 31, 2023. We expect to sell the remaining shares in 2023. Warrants Outstanding warrants at March 31, 2023 and December 31, 2022 are as follows:
| Number of Warrants |  | Exercise Price |  | Expiration Date
GHF, Inc. | 200,000 |  |  | $ | 1.0000 |  |  | August 22, 2024
GHF, Inc. | 500,000 |  |  | $ | 0.4555 |  |  | December 15, 2024
GHF, Inc. | 500,000 |  |  | $ | 2.5217 |  |  | December 15, 2024
Total Outstanding warrants | 1,200,000 |  |  |  |  |

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