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SHAREHOLDERS’ DEFICIT
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
SHAREHOLDERS’ DEFICIT

NOTE－16 SHAREHOLDERS’ DEFICIT

Authorized stock

The Company is authorized to issue two classes of stock. The total number of shares of stock which the Company is authorized to issue is 100,000,000 shares of capital stock, consisting of 95,000,000 shares of common stock, $0.0001 par value per share, and 5,000,000 shares of preferred stock, $0.0001 par value per share.

The holders of the Company’s common stock are entitled to the following rights:

Voting Rights: Each share of the Company’s common stock entitles its holder to one vote per share on all matters to be voted or consented upon by the stockholders. Holders of the Company’s common stock are not entitled to cumulative voting rights with respect to the election of directors.

Dividend Right: Subject to limitations under Nevada law and preferences that may apply to any shares of preferred stock that the Company may decide to issue in the future, holders of the Company’s common stock are entitled to receive ratably such dividends or other distributions, if any, as may be declared by the Board of the Company out of funds legally available therefor.

Liquidation Right: In the event of the liquidation, dissolution or winding up of our business, the holders of the Company’s common stock are entitled to share ratably in the assets available for distribution after the payment of all of the debts and other liabilities of the Company, subject to the prior rights of the holders of the Company’s preferred stock.

Other Matters: The holders of the Company’s common stock have no subscription, redemption or conversion privileges. The Company’s common stock does not entitle its holders to preemptive rights. All of the outstanding shares of the Company’s common stock are fully paid and non-assessable. The rights, preferences and privileges of the holders of the Company’s common stock are subject to the rights of the holders of shares of any series of preferred stock which the Company may issue in the future.

Common stock outstanding

As of December 31, 2021 and 2020, the Company had a total of 19,732,406 and 7,413,600 shares of its common stock issued and outstanding, respectively.

On February 10, 2021, the Company effected a 750 for 1 stock split of the issued and outstanding shares of the Company’s common stock. The number of authorized shares and par value remain unchanged. All share and per share information in this financial statements and footnotes have been retroactively adjusted for the periods presented, unless otherwise indicated, to give effect to the forward stock split.

On September 21, 2021, the Company effected a 1 for 2.5 stock split of the issued and outstanding shares of the Company’s common stock. The number of authorized shares and par value remain unchanged. All share and per share information in this financial statements and footnotes have been retroactively adjusted for the periods presented, unless otherwise indicated, to give effect to the reverse stock split.

An additional result of the stock split was that the stated value of preferred stock, the number of designated shares and outstanding shares of each series of preferred stock was unchanged in accordance to the respective certificate of designations. The number of authorized shares of preferred stock remained unchanged.

On November 8, 2021, the Company entered into an underwriting agreement with Maxim Group LLC, related to the offering of 2,888,889 shares of the Company’s common stock (the “Firm Share”), at a public offering price of $9.00 per share. Under the terms of the Underwriting Agreement, the Company has granted the Underwriters an option, exercisable for 45 days, to purchase an additional 236,111 shares of common stock (the “Option Shares”) to cover over-allotments. The Company’s common stock was listed on the Nasdaq Capital Market on November 9, 2021 and began trading on such date. The closings (the IPO Closing.) of the offering and sale of the Firm Shares and the sale of 236,111 Option Shares occurred on November 12, 2021. Aggregate gross proceeds from the closings related to the Firm Shares and the Option Shares was $26,000,001 and $2,124,999, respectively.

The Cost of IPO related expenses incurred $2,677,846.

Upon the IPO Closings, all outstanding shares of preferred stock series A, B, B-1, C and C-1 were automatically converted into 888,889 shares, 764,400 shares, 48,000 shares, 465,600 shares and 4,195,200 shares of the Company’s common stock for the value of $8,000,000, $3,412,503, $466,720, $8,353,373 and $5,536,832, respectively.

During the years ended December 31, 2021 and 2020, the Company issued 814,950 and 545,400 shares of common stock for employee services for the value of $2,85,026 and $473,503, respectively.

During the years ended December 31, 2021 and 2020, the Company issued 1,157,630 and 0 shares of common stock for director’s accrued salaries for the value of $960,834 and $0, respectively. The Company accounted $2,894,075 additional cost on these share issuance as loss on fair value of shares issued in 2021.

During the years ended December 31, 2021 and 2020, the Company issued 450,000 and 0 shares of its common stock for director’s bonus for the value of $3,442,499 and $0, respectively.

During the years ended December 31, 2021 and 2020, the Company issued 9.300 and 0 shares of its common stock for staff’s bonus for the value of $71,145 and $0, respectively.

 

During the years ended December 31, 2021 and 2020, the Company cancelled 150,000 and 0 shares of its common stock at par value.

During the years ended December 31, 2021 and 2020, the Company issued 277,409 shares of its common stock for share exchange with the subsidiary’s 10% non-controlling interest at $28 and valued it at par as there was no change in the control over the subsidiary.

During the year ended December 31, 2021, a total of 69 warrants were exercised in exchange to 20,700 shares of its common stock for the value of $28,980. During the year ended December 31, 2020, no warrants were exercised to common stock.

During December 2021, we issued 208,369 shares of our common stock to five consultants in exchange for consulting services value of $2,032,345.

During December, 2021, we issued 3,437 of our share of common stock to six of our employees as compensation value of $39,969.

During December, 2021, we issued 34,222 to our independent board directors as directors compensation value of $308,000.

During December, 2021, we issued 5,700 shares of our common stock to Brugau Pte Ltd and Cory Bentley to make up for shortfalls in original issuances pursuant to the terms of agreements value of $109,497.

Warrants

In August 2019, the Company issued 21,000 shares of warrants to one employee for compensation of his service to purchase 21,000 shares of its common stock for the fair value of $17,500. Each share of warrant is converted to one share of common stock at an exercise price of $0.0001. The warrants will expire on the second (2nd) anniversary of the initial date of issuance. As at December 31, 2019, none of the warrants have been exercised. 21,000 shares fully exercised during the year ended December 31, 2020.

In December 2020, the Company issued certain numbers of warrants pursuant to the Series C-1 Subscription Agreement. Each redeemable warrant is entitled the holder to purchase one C-1 preferred share at a price of $420 per share. The warrants shall be exercisable on or before December 31, 2020 and 2021. During the year ended December 31, 2021, the Company issued 2,120 warrants. During the year ended December 31, 2020, the Company issued 4,094 warrants. As of date, the warrants were issued as part of cost of equity funding and therefore classified as cost of issuance and have no accounting effect.

In December 2020, a total of 838 warrants were exercised in exchange to 838 Series C-1 preferred shares. (refer note 13 for details).

Below is a summary of the Company’s issued and outstanding warrants as of December 31, 2021 and 2020:

Schedule of warrants issued and outstanding 

               
   Warrants  Weighted average exercise price  Weighted
average
remaining
contractual life
(in years)
Outstanding as of December 31, 2019 (a)   21,000   $0.0001    1.3 
Issued (b)   4,094   $420    0.9 
Exercised   (21,838)  $(6.34)   1 
Expired   (1,209)  $(420)   (0.6)
Outstanding as of December 31, 2020 (b)   2,047   $420    0.6 
Issued (b)   2,120   $420    0.5 
Issued (a)   144,445   $9.90    5.0 
Exercised (b)   (307)  $(420)   —   
Expired   —     $—      —   
Outstanding as of December 31, 2021   148,305   $20.57    4.88 

(a) Common stock will be issued if those warrants exercise The 144,445 warrants having intrinsic value of $73,667 as of December 31, 2021.

 

(b) Preferred stock series C-1 will be issued if those warrants exercise. Further, those preferred stock series C-1 will automatically convert into the 1,158,000 and 614,400 common stock with the intrinsic value of $10,433,580 and nil as of December 31, 2021 and 2020, respectively.

On April 19, 2021, the Company extended the expiry date of the Warrant issued to Preferred Series C-1 holder by six months from June 30, 2021 to December 31, 2021. Further, on November 16, 2021, the Company extended the expiry date of the Warrant issued to Preferred Series C-1 holder by six months from December 31, 2021 to June 30, 2022. The Company considered this warrant as permanent equity per ASC Topic 815-40-35-2, the warrants would not be marked to market at each financial reporting date. However, where there is a subsequent changes in assumptions related warrants (in the instant case, an extension of the expiration date of the warrants), the difference between the amount originally recorded and the newly calculated amount, based upon the changed assumptions, is determined and the difference between the before and after valuation is recorded as an expense, with the corresponding credit to additional paid-in capital. The Company recorded additional warrants modification expense of $58,363 in 2021.

The Company determined the fair value using the Black-Scholes option pricing model with the following assumptions

Schedule of Stock options assumptions 

          
   Before modification  After Modification
Dividend rate   0%   0%
Risk-free rate   0.06%   0.12%
Weighted average expected life (years)   9 months    18 months 
Expected volatility   25%   25%
Exercise price  $1.4   $1.4 

 

(a) The Company considered 25% volatility as from inception through the date of the Company common stocks.

 

Director’s Stock option

On December 8, 2021, the Board of Directors approved a grant to Dennis Nguyen of a 10-year options to purchase 1,945,270 shares options at an exercise price of $6.49 per share that will be exercisable at any time.

Schedule of Stock Option 

                
   Share option  Weighted average exercise price  Weighted
average
remaining
contractual life
(in years)
Outstanding as of December 31, 2019     —     $—      —   
Granted    —      —      —   
Exercised    —      —      —   
Expired    —      —      —   
Outstanding as of December 31, 2020    —      —      —   
Granted    1,945,270    6.49    10 
Exercised     —      —      —   
Expired    —      —      —   
Outstanding as of December 31, 2021    1,945,270   $6.49    10 

 

The total fair value of options vested during the years ended December 31, 2021 and 2020 was $12,159,652 and $0 respectively.

The aggregate intrinsic value of share options outstanding as of December 31, 2021 and 2020 was $7,624,458 and $0, respectively.

The Company determined the fair value using the Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2021 and 2020:

     
   December 31, 2021
Dividend rate   0%
Risk-free rate   1.52%
Weighted average expected life (years)   10 years 
Expected volatility   130%
Share price  $6.49 

Director’s stock awards

               
Unvested as of December 31, 2019    —     $—      —   
Issued   —      —      —   
Vested   —      —      —   
Cancelled   —      —      —   
Unvested as of December 31, 2020    —      —      —   
Issued   814,950    7.65    2 years 
Vested    (162,990)   7.65    —   
Cancelled   —      —      —   
Unvested as of December 31, 2021   651,960   $7.65    1.67 years 

 

Shares Unvested at period-end   651,960   $7.65 

Below is the unvested shares vesting schedule at future years 

Year ended December 31 2022    325,980 
Year ended December 31 2023    325,980 
Total    651,960 

The Company issued 814,950 shares of its common stock on September 1, 2021 (“start date”) of which 651,960 shares shall be subject to vesting. The vesting shares shall be vested in accordance with the following vesting schedule: 162,990 vesting shares will vest every six-months for a two-year period from the start date, with the first vesting date being March 1, 2022. For the years ended December 31, 2021 and 2020, the Company recognized the amortization of stock compensation expense of $2,805,025 and $0, respectively. The remaining unamortized vesting expenses in 1.67 years which estimated with a cost of $3,429,342.