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STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2025
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

18. STOCKHOLDERS’ EQUITY

 

Class A Common Stock

 

Class A common stock confers upon the holders the rights to receive notice to participate and vote at any meeting of stockholders of the Company, to receive dividends, if and when declared, and to participate in a distribution of surplus of assets upon liquidation of the Company.

 

Class B Common Stock

 

The Class B common stock is identical to the Class A common stock, with the exception that each share thereof carries 10 times the voting power of a share of Class A common stock. The Class B common stock is convertible at any time into Class A common stock on a one-for-one basis at the option of the holder of the Class B common stock.

 

Preferred Stock

 

Preferred stock as of June 30, 2025 consisted of the following:

                         
   Par Value
Per Share		   Stated Value
Per Share		   Shares
Authorized		   Liquidation
Preference		   Shares Issued and
Outstanding at
June 30, 2025		 
 Series A Convertible Preferred Stock  $0.001   $25    1,000,000   $176,000    7,040 
 Series B Convertible Preferred Stock  $0.001   $1,000    60,000    2,681,000    2,681 
 Series C Convertible Preferred Stock  $0.001   $1,000    75,000    50,000,000    50,000 
 Series D Cumulative Redeemable Perpetual Preferred Stock  $0.001   $25    2,000,000    14,640,000    585,613 
 Series E Cumulative Redeemable Perpetual Preferred Stock  $0.001   $25    2,500,000    16,250,000    649,998 
 Series F Exchangeable Preferred Stock  $0.001   $1,000    1,000,000    999,000    998,577 
 Series G Convertible Preferred Stock  $0.001   $1,000    25,000    960,000    960 
 Unallocated             18,340,000    -    - 
 Total             25,000,000   $85,706,000    2,294,869 

 

Preferred stock as of December 31, 2024 consisted of the following:

 

   Par Value
Per Share		   Stated Value
Per Share		   Shares
Authorized		   Liquidation
Preference		   Shares Issued and
Outstanding at
December 31, 2024		 
Series A Convertible Preferred Stock  $0.001   $25    1,000,000   $176,000    7,040 
Series C Convertible Preferred Stock  $0.001   $1,000    75,000    50,000,000    50,000 
Series D Cumulative Redeemable Perpetual Preferred Stock  $0.001   $25    2,000,000    8,096,000    323,835 
Series E Cumulative Redeemable Perpetual Preferred Stock  $0.001   $25    2,500,000    16,250,000    649,998 
Series F Exchangeable Preferred Stock  $0.001   $1,000    1,000,000    999,000    998,577 
Series G Convertible Preferred Stock  $0.001   $1,000    25,000    -    - 
Unallocated             18,400,000    -    - 
Total             25,000,000   $75,521,000    2,029,450 

 

The Company is authorized to issue 25.0 million shares of preferred stock, $0.001 par value. As of June 30, 2025, the rights, preferences, privileges and restrictions on the remaining authorized 18.3 million shares of preferred stock have not been determined. The Board is authorized to designate a new series of preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred shares.

 

$50.0 Million Securities Purchase Agreement for Sale of Series B Convertible Preferred Stock

 

On March 31, 2025, the Company entered into a securities purchase agreement with an institutional investor pursuant to which the Company agreed to sell up to 50,000 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) for a total purchase price of up to $50.0 million. The securities purchase agreement provides that the transaction shall be conducted through 49 separate tranche closings; however, the investor may, at its sole discretion, purchase additional shares ahead of the scheduled closings.

 

During the three months ended June 30, 2025, the Company issued an aggregate of 7,899 shares of Series B Preferred Stock for gross proceeds of approximately $7.9 million. In the same period, the investor converted approximately 5,238 shares of Series B Preferred Stock into shares of Class A common stock. In addition, approximately 20 shares of Series B Preferred Stock were issued as paid-in-kind (“PIK”) dividends pursuant to the terms of the Series B Preferred Stock.

 

Each share of Series B Preferred Stock has a stated value of $1,000 and is convertible into shares of Class A common stock at a conversion price equal to the greater of (i) the Floor Price and (ii) 75% of the Company’s lowest VWAP during the five trading days immediately prior to the date of conversion, subject to a maximum of $10.00 per share. The holders are entitled to cumulative dividends at a 15% annual rate, payable monthly in arrears, and for the first two years, the Company may elect to pay such dividends in additional shares of Series B Preferred Stock in lieu of cash.

 

On April 23, 2025, the Company filed a Certificate of Amendment to the Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible Preferred Stock. This amendment, approved by the Board of Directors on April 22, 2025, revised the definition of “Conversion Price” to the greater of (i) the Floor Price and (ii) 75% of the Company’s lowest VWAP during the five trading days immediately preceding conversion, subject to a maximum of $10.00 per share.

 

Termination of Equity Purchase Agreement

 

On May 28, 2025, the Company and Orion Equity Partners, LLC (“Orion”) mutually agreed to terminate the Purchase Agreement originally entered into on June 24, 2024, as subsequently amended (the “Purchase Agreement”). The Purchase Agreement provided the Company with the right, subject to certain terms and conditions, to sell up to $25.0 million of its 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock (the “Series D Preferred Stock”) to Orion over a 36-month period. Prior to termination, the Company issued an aggregate of 0.3 million shares of Series D Preferred Stock pursuant to the Purchase Agreement, generating net proceeds of approximately $3.5 million. No further shares will be issued under the Purchase Agreement following its termination.

 

Sales of Series G Preferred Stock and Warrants

 

During the six months ended June 30, 2025, the Company sold to Ault & Company an aggregate of 960 shares of Series G Convertible Preferred Stock and warrants to purchase an aggregate of 0.2 million shares of Class A common stock, for an aggregate purchase price of $1.0 million.

 

Conversions of Convertible Notes

 

During the six months ended June 30, 2025, the Company issued 4.9 million shares of Class A common stock upon conversion of convertible promissory notes payable (see Note 16).