XML 35 R25.htm IDEA: XBRL DOCUMENT v3.25.3
STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 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 September 30, 2025 consisted of the following:

 

                         
   Par Value
Per Share		   Stated Value
Per Share		   Shares
Authorized		   Liquidation
Preference		   Shares Issued and
Outstanding at
September 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    -    - 
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 
Series H Convertible Preferred Stock  $0.001   $1,000    100,000    4,000,000    4,000 
Unallocated             18,240,000    -    - 
Total             25,000,000   $87,025,000    2,296,188 

 

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 September 30, 2025, the rights, preferences, privileges and restrictions on the remaining authorized 18.2 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.

 

Issuance of Class A Common Stock pursuant to the At-the-Market Offering

 

On August 29, 2025, the Company entered into a sales agreement with Wilson-Davis & Co., Inc. to sell shares of the Company’s class A common stock, having an aggregate offering price of up to $125 million from time to time, through an ATM offering program. Between August 29, 2025 and September 30, 2025, the Company received gross proceeds of $38.8 million through the sale of 82.7 million shares of the Company’s class A common stock through the ATM offering.

 

$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 of Series B Preferred Stock prior to the scheduled closings.

 

During the nine months ended September 30, 2025, the Company issued an aggregate of 23,914 shares of Series B Preferred Stock for gross proceeds of approximately $23.9 million. In addition, approximately 92 shares of Series B Preferred Stock were issued as paid-in-kind (“PIK”) dividends pursuant to the terms of the Series B Preferred Stock. In the same period, the investor converted approximately 24,006 shares of Series B Preferred Stock, including PIK shares, into shares of Class A common 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 nine months ended September 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.

 

Series H Convertible Preferred Stock Securities Purchase Agreement with Ault & Company

 

On July 31, 2025, the Company entered into a securities purchase agreement (the “July 2025 SPA”) with Ault & Company, pursuant to which it agreed to sell, in one or more closings, to Ault & Company up to 100,000 shares of Series H convertible preferred stock (“Series H Preferred Stock”) for a total purchase price of up to $100.0 million. The July 2025 SPA provides that the financing may be conducted through one or more closings. During the three months ended September 30, 2025, the Company sold to Ault & Company 4,000 shares of Series H Preferred Stock for an aggregate purchase price of $4.0 million.

 

Each share of Series H Preferred Stock has a stated value of $1,000.00 and is convertible into shares of class A common stock at a conversion price equal to the greater of (i) $0.10 per share and (ii) the lesser of (A) $0.79645 or (B) 105% of the volume weighted average price of the Class A common stock during the five trading days immediately prior to the date of conversion. 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 holders of Series H Preferred Stock are entitled to cumulative cash dividends at an annual rate of 9.5%, or $95.00 per share, based on the stated value per share. Dividends shall accrue for 10 years from the date of issuance of such shares of Series H Preferred Stock and are payable monthly in arrears. For the first two years, the Company may elect to pay the dividend amount in shares of Class A common stock rather than cash. The holders of the Series H Preferred Stock are entitled to vote with the Class A common stock as a single class on an as-converted basis.

 

Conversions of Convertible Notes

 

During the nine months ended September 30, 2025, the Company issued 10.0 million shares of Class A common stock upon conversion of convertible promissory notes payable (see Note 16).

 

2025 Stock Incentive Plan and Option Grants

 

On July 31, 2025, the Board of Directors approved grants of 7.25 million non-qualified stock options to purchase shares of Class A common stock for the Company’s directors and executive officers. The grants were issued on August 12, 2025, at an exercise price of $0.72 per share. These grants are made outside of the 2025 Stock Incentive Plan and are subject to stockholder and exchange approval.

 

On July 31, 2025, the Board also approved the Company’s 2025 Stock Incentive Plan, which authorizes the issuance of up to 8.0 million shares, and approved grants of options under the plan covering an aggregate of 6.2 million shares to employees at an exercise price of $0.72 per share.

 

Vesting for all 13.45 million grants is 50% upon stockholder and exchange approval and 50% in equal monthly installments over 24 months beginning January 1, 2026.

 

Because the grants are contingent upon stockholder and exchange approval, the options are not considered granted for accounting purposes as of September 30, 2025. Accordingly, no stock-based compensation expense has been recognized, and such expense will commence only once the required approvals are obtained and the grants are deemed effective under U.S. GAAP.

 

Distribution of Class B Common Stock

 

On September 22, 2025, the Company announced a planned dividend of 20 million shares of its Class B Common Stock to all holders of its Class A Common Stock and its Class B Common Stock, as well as its Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, Series G Convertible Preferred Stock and Series H Preferred Stock on an as-converted basis. The record date for this dividend was October 6, 2025, and the payment date was October 31, 2025.