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SUBSEQUENT EVENTS | 12 Months Ended
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Dec. 31, 2024
Subsequent Events [Abstract] |
SUBSEQUENT EVENTS | 34. SUBSEQUENT EVENTS Issuances of Series D Preferred Stock From January 1, 2025 through April 14, 2025, the Company issued a total of 135,957 shares of its Series D preferred stock for the settlement of ELOC advances totaling $2.0 million. OID Only Term Note On January 14, 2025, the Company entered into a term note agreement with institutional investors for $2.5 million. The term note was issued at a discount, with net proceeds to the Company of $2.2 million. The term note does not accrue any interest. The term note was scheduled to mature on March 1, 2025. The term note is guaranteed by Mr. Ault. 15% Promissory Note On March 7, 2025, the Company entered into a promissory note agreement with an institutional investor with a principal amount of $0.5 million and an interest rate of 15%. The maturity date of the promissory note is December 7, 2025. Mr. Ault entered into a personal guaranty agreement for the benefit of the investor. March 2025 Convertible Promissory Note On March 21, 2025 the Company entered into an exchange agreement with SJC Lending, LLC, a Delaware limited liability company (“SJC”), pursuant to which the Company issued to SJC a convertible promissory note in the principal face amount of $4.9 million (the “Note”) in exchange for the cancellation of the following notes the Company issued to Steve J. Caspi, the sole member of SJC, who transferred such notes to SJC, (i) a term note issued on January 14, 2025 in the principal face amount of $2.5 million, (ii) a promissory note issued on March 7, 2025 in the principal face amount of $0.5 million, (iii) a promissory note issued on March 12, 2025 in the principal face amount of $1.5 million and (iv) a promissory note issued on March 13, 2025 in the principal face amount of $0.3 million. The Note accrues interest at the rate of 15% per annum, unless an event of default (as defined in the Note) occurs, at which time the Note would accrue interest at 18% per annum. The Note will mature on December 31, 2025. The Note is convertible into shares of Class A common stock at any time after NYSE American (“NYSE”) approval of the Supplemental Listing Application (the “SLAP”) at a conversion price equal to the greater of (i) $0.40 per share (the “Floor Price”), which Floor Price shall not be adjusted for stock dividends, stock splits, stock combinations and other similar transactions and (ii) the lesser of 75% of the VWAP (as defined in the Note) of the Class A common stock during the five trading days immediately prior to (A) the date of issuance of the Note or (B) the date of conversion into shares of Class A common stock, but not greater than $10.00 per share (the “Maximum Price”), which Maximum Price shall be adjusted for stock dividends, stock splits, stock combinations and other similar transactions. Amendment to Securities Purchase Agreement On March 30, 2025, the Company entered into an amendment to the (i) November 2023 Securities Purchase Agreement (the “SPA”) with Ault & Company and (ii) the related Certificate of Designation of Preferences, Rights and Limitations of the Series C Convertible Preferred Stock, to (A) eliminate the ability of the purchaser to satisfy the purchase price for the securities through the surrender of a portion of the outstanding note, thereby requiring that all future closings under the SPA be funded solely in cash, and (B) extend the outside date by which the final closing may occur to March 31, 2025, subject to the purchaser’s right to further extend such date for an additional ninety (90) days. April 2025 Convertible Promissory Note On April 1, 2025, the Company issued to an institutional investor, a convertible promissory note in the principal face amount of $1.7 million (the “April 2025 Note”) in consideration for an advance of $1.5 million previously made by the investor to the Company (the “Transaction”). The April 2025 Note has a principal face amount of $1.7 million and was issued with an OID of 10%. The April 2025 Note accrues interest at the rate of 15% per annum, unless an event of default (as defined in the April 2025 Note) occurs, at which time the April 2025 Note would accrue interest at 18% per annum. The April 2025 Note will mature on September 30, 2025. The April 2025 Note is convertible into shares of the Company’s class A common stock at any time after NYSE approval of the SLAP at a conversion price equal to the greater of (i) $0.40 per share, which shall not be adjusted for stock dividends, stock splits, stock combinations and other similar transactions and (ii) the lesser of 75% of the VWAP (as defined in the April 2025 Note) of the Class A common stock during the five trading days immediately prior to the closing date or the date of conversion. Series B Convertible Preferred Stock Securities Purchase Agreement On March 31, 2025 (the “Execution Date”), the Company entered into a Securities Purchase Agreement (the “Series B Agreement”) with SJC, pursuant to which the Company agreed to sell to SJC up to 50,000 shares of Series B convertible preferred stock (the “Series B Convertible Preferred Stock”), which are convertible into the Company’s Class A common stock for a total purchase price of up to $50.0 million (the “Preferred Transaction”). The consummation of the transactions contemplated by the Series B Agreement, specifically the conversion of the Series G Convertible Preferred Stock in an aggregate number in excess of 19.99% on the execution date of the Series B Agreement, are subject to various customary closing conditions as well as regulatory and stockholder approval. The Series B Agreement contains customary termination provisions for the Purchaser under certain circumstances, and the Series B Agreement shall automatically terminate if the closing has not occurred prior to June 30, 2025, though such date may be extended by SJC as set forth in the Series B Agreement. The Series B Agreement provides that the Financing may be conducted through up to 49 closings. The material terms of the Series B Agreement and the Series B Convertible Preferred Stock are summarized below. Description of the Series B Agreement Holders of the Series B Preferred Stock are entitled to written notice of stockholder meetings or written consents, along with related materials and information, in accordance with the Company’s Bylaws and the Delaware General Corporation Law. The Series B Agreement provides that the Preferred Transaction shall be conducted through 49 separate Tranche Closings, provided, however, that the Investor has the ability, exercisable in its sole discretion, to purchase any number of shares of Series B Preferred Stock prior to the dates of the Tranche Closings provided for in the Series B Agreement. Pursuant to the Series B Agreement, the initial Tranche Closing, which will close promptly after SJC has converted out of certain convertible notes that it holds, will consist of the sale and issuance to SJC of 2,000 shares of Series B Preferred Stock for an aggregate of $2.0 million (the “Initial Tranche Closing”). Pursuant to the Series B Agreement, SJC, provided certain closing conditions have been met, including that all underlying shares of Class A Comon Stock shall have been registered for resale under the Securities Act of 1933, as amended (the “Securities Act”), shall purchase up to 4,800 shares of Series B Preferred Stock on a monthly basis, with SJC being required to purchase 1,000 shares per month (each, a “Subsequent Tranche Closing”) until all shares of Series B Preferred Stock have been issued and sold to SJC. Commencing on the Execution Date and continuing for a period of 90 days thereafter, neither the Company nor any subsidiary thereof shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or instruments convertible into, exercisable or exchangeable for such shares of Class A common stock, with certain exceptions. Additionally, commencing on the Execution Date and continuing for a period of one year thereafter, the Company shall be prohibited from entering into a variable rate transaction. From the Execution Date and continuing until the date that is two years therefrom, SJC shall have a right of first refusal with respect to any investment proposed to be made by any individual or entity for each and every future public or private equity offering, including a debt instrument convertible into equity of the Company during such period. Description of the Series B Preferred Stock Conversion Rights Each share of Series B Preferred Stock has a stated value of $1,000 and is convertible into shares of Class A common stock (the “Conversion Shares”) at a at a conversion price equal the lesser of a 25% discount to the Company’s Volume Weighted Average Price during the five trading days immediately prior to (A) the Execution Date or (B) the date of conversion into shares of Class A common stock, but not greater than $10 per share (the “Maximum Price”), which Maximum Price shall be adjusted for stock dividends, stock splits, stock combinations and other similar transactions (the “Conversion Price”). Notwithstanding the foregoing, in no event shall the Series B Preferred Stock be convertible at less than $0.40 (the “Floor Price”). The Conversion Price is subject to adjustment in the event of an issuance of Class A common stock at a price per share lower than the Conversion Price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events. The Floor Price will under no circumstances be adjusted for stock dividends, stock splits, stock combinations or similar transactions. Voting Rights The holders of the Series B Preferred Stock are entitled to vote with the Class A common stock as a single class on an as-converted basis, subject to applicable law provisions of the Delaware General Corporation Law and the NYSE American (at times referred to as the “Exchange”), provided however, that for purposes of complying with Exchange regulations, the conversion price, for purposes of determining the number of votes the holder of Series B Convertible Preferred Stock is entitled to cast, shall not be lower than $2.44 (the “Voting Floor Price”), which represents the closing sale price of the Class A common stock on the trading day immediately prior to the Execution Date. The Voting Floor Price shall be adjusted for stock dividends, stock splits, stock combinations and other similar transactions. Dividend Rights The holders of Series B Convertible Preferred Stock are entitled to cumulative cash dividends at an annual rate of 15%, or $150 per share, based on the stated value per share. Dividends shall accrue from the date of the Initial Tranche Closing, for as long as any shares of Series B Preferred Stock remain issued and outstanding and are payable monthly in arrears. For the first two years, the Company may elect to pay the dividend amount in Class A common stock (the “PIK Shares”) rather than cash, with the number of shares of Class A common stock issued at the Conversion Price at the date that the dividend payment is due. Dividends will accrue regardless of the Company’s earnings or funds availability and will not exceed the full cumulative dividends. Liquidation Rights In the event of liquidation, dissolution, or winding up of the Company, the holders of Series B Preferred Stock have a preferential right to receive an amount equal to the stated value per share of Series B Preferred Stock before any distribution to other classes of capital stock, provided, however, that it ranks on a pari passu basis with the Series C Preferred Stock and the Series G Preferred Stock. If the assets are insufficient, the distribution will be prorated among the holders of Series B Preferred Stock, Series C Preferred Stock and Series G Preferred Stock. The remaining assets will be distributed pro rata to the holders of outstanding Capital Stock and all holders of Series B Preferred Stock as if they had converted their Series B Preferred Stock into Class A common stock. The Series B Preferred Stock rank senior over other classes of preferred stock, including the Series A, D, E and F Preferred Stock. Additionally, any transaction that constitutes a change of control transaction shall be deemed to be a liquidation under the Certificate of Designation of the Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the “Series B Certificate of Designation”). The Company may not issue Conversion Shares to the extent such issuances would result in an aggregate number of shares of Class A common stock exceeding 19.99% of the total shares of Class A common stock issued and outstanding as of the Execution Date, in accordance with the rules and regulations of the Exchange unless the Company first obtains stockholder approval (the “Stockholder Approval”). Pursuant to the Series B Agreement and as required by the Exchange, the Company agreed to file a proxy statement to obtain the Stockholder Approval.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
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