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Stockholders' Equity
 12 Months Ended
Dec. 31, 2023
Stockholders' Equity  
Stockholders' Equity

18.

Stockholders’ Equity


Financings


Registered Direct Offering –


In October 2021, the Company closed a registered direct offering and concurrent private placement of its common stock (the "October Offering") that the Company effected pursuant to the Securities Purchase Agreement that it entered into on October 25, 2021 with an institutional investor and received gross proceeds of $11.55 million. Pursuant to the terms of the Purchase Agreement, the Company issued to the investor (A) in a registered direct offering (i) 975,000 shares (the “Public Shares”) (48,750 shares as adjusted for the May Stock Split), of its Common Stock, par value $0.01 per share (the “Common Stock”), and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 2,189,384 shares (the “Pre-Funded Warrant Shares”) of Common Stock (109,469 shares as adjusted for the May Stock Split), and (B) in a concurrent private placement, Series A warrants to purchase up to 1,898,630 shares (the “Common Stock Warrant Shares”) (94,932 shares as adjusted for the May Stock Split), of Common Stock (the “Common Stock Warrants,” and together with the Public Shares and the Pre-Funded Warrants, the “Securities”) (the “Offering The Pre-Funded Warrants were immediately exercisable at a nominal exercise price of $0.001 and all Pre-Funded Warrants sold have been exercised. The Common Stock Warrants have an exercise price of $4.80 per share, ($96 as adjusted for the May Stock Split), are exercisable upon issuance and will expire five years from the date of issuance. A.G.P./Alliance Global Partners (the “Placement Agent”) acted as the exclusive placement agent for the transaction pursuant to that certain Placement Agency Agreement, dated as of October 25, 2021, by and between the Company and the Placement Agent (the “Placement Agency Agreement”), the Placement Agent received (i) a cash fee equal to seven percent (7.0%) of the gross proceeds from the placement of the Securities sold by the Placement Agent in the Offering and (ii) a non-accountable expense allowance of one half of one percent (0.5%) of the gross proceeds from the placement of the Gross Proceeds Securities sold by the Placement Agent in the Offering. The Company also reimbursed the Placement Agent’s expenses up to $50,000 upon closing the Offering. The net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s estimated offering expenses was approximately $10.5 million. 

 

Securities Purchase Agreement – In April 2019, the Company issued 42,388 shares of its common stock (2,119 shares as adjusted for the May Stock Split), at $22.00 per share ($440 as adjusted for the May Stock Split), through a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors and accredited investors. Concurrently with the sale of the common stock, pursuant to the Purchase Agreement, the Company also sold common stock purchase warrants to such investors to purchase up to an aggregate of 42,388 shares of common stock. (2,119 shares as adjusted for the May Stock Split),. The Company incurred $379,816 in issuance costs from the offering and issued 4,239  (212 as adjusted for the May Stock Split), warrants to the underwriters. The warrants are further discussed in Note 18.


Underwriting Agreement – In August 2019, the Company issued 45,000 shares of its common stock (2,250 shares as adjusted for the May Stock Split),  at $17.00 per share ($340 as adjusted for the May Stock Split), pursuant to the terms of an Underwriting Agreement (the “Underwriting Agreement”) to the public. The Company incurred $181,695 in issuance costs from the offering and issued warrants to purchase 2,250 shares of common stock (112 shares adjusted for the May Stock Split), to the underwriter. The warrants are further discussed in Note 19.


Equity Purchase Agreement - On February 7, 2023, the Company entered into an Equity Purchase Agreement (the “EP Agreement”) and related Registration Rights Agreement (the “Rights Agreement”) with Peak One, pursuant to which the Company has the right, but not the obligation, to direct Peak One to purchase up to $10,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the EP Agreement and Rights Agreement which includes but is not limited to filing a registration statement with the Securities and Exchange Commission and registering the resale of any shares sold to Peak One. Further, under the EP Agreement and subject to the Maximum Commitment Amount, the Company has the right, but not the obligation, to submit a Put Notice (as defined in the EP Agreement) from time to time to Peak One (i) in a minimum amount not less than $25,000.00 and (ii) in a maximum amount up to the lesser of ( (a) $750,000.00 or (b) 200% of the Average Daily Trading Value (as defined in the EP Agreement).


In connection with the EP Agreement, the Company issued to Investments, the general partner of Peak One, 75,000 shares of its common stock (3,750 shares as adjusted for the May Stock Split), and agreed to file a registration statement registering the common stock issued or issuable to Peak One and Investments under the Agreement for resale with the Securities and Exchange Commission within 60 calendar days of the Agreement, as more specifically set forth in the Rights Agreement. The registration statement was declared effective on April 14, 2023


The obligation of Peak One to purchase the Company’s common stock under the EP Agreement began on the date of the EP Agreement, and ends on the earlier of (i) the date on which Peak One shall have purchased common stock pursuant to the EP Agreement equal to the Maximum Commitment Amount, (ii) thirty six (36) months after the date of the EP Agreement, (iii) written notice of termination by the Company or (iv) the Company’s bankruptcy or similar event (the “Commitment Period”), all subject to the satisfaction of certain conditions set forth in the EP Agreement.


During the Commitment Period, the purchase price to be paid by Peak One for the common stock under the EP Agreement will be 97% of the Market Price, which is defined as the lesser of the (i) closing bid price of the common stock on its principal market on the trading day immediately preceding the respective Put Date (as defined in the Agreement), or (ii) lowest closing bid price of the common stock during the Valuation Period (as defined in the Agreement), in each case as reported by Bloomberg Finance L.P or other reputable source designated by Peak One.


The EP Agreement and the Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Among other things, Peak One represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.


 Under the EP Agreement, the Company issued 657,895 shares of common stock (32,895 shares as adjusted for the May Stock Split), for $394,735.


Common Stock Issued for Services – During the year ended December 31, 2023, the Company issued 287,512 shares of common stock  (14,376 shares as adjusted for the May Stock Split), for services provided. The value of the shares amounted to $437,325.


Common Stock Issued for Debt Issuances – During the year ended December 31, 2023, the Company issued 50,000 shares of common stock (2,500 shares as adjusted for the May Stock Split), for debt issuances. Additionally, the Company issued warrants for such insurances. The total value of the shares and warrants amounted to $354,329.


Restricted Stock Units – During the year ended December 31, 2023, the Company issued 3,020,334 shares of common stock (151,017 shares as adjusted for the May Stock Split), for previously vested restricted stock units. During the year ended December 31, 2022, the Company issued 43,333 shares of common stock (2,166 shares as adjusted for the May Stock Split) for previously vested restricted stock units.


Separation - In connection with the Separation,  discussed in Note 2 the Company recorded the distribution based upon the stockholders’ equity on such date and the closing market price of the Company’s common stock. The distributed fair market value was $8,220,004.


Noncontrolling interest – During the year ended December 31, 2023, the Company recorded a distribution of $46,417 to its noncontrolling interest and a net gain from its controlling interest. In addition, during the year ended December 31, 2023, SG DevCorp  recorded $684,438 of additional equity transactions  which related to transactions in its own stock from debt issuances to third parties.


Treasury stock – During the year ended December 31, 2023, the Company repurchased additional treasury stock for $42,716.


Conversion – During the year ended December 31, 2023, the Company converted $730,000 of notes payable and $45,000 of accrued interest for a total of 538,917 shares of common stock. (26,946 shares as adjusted for the May Stock Split),. Such amount was converted within the terms of the agreement with no gains or losses recognized on the transactions.


Warrant exercise – During the year ended December 31, 2023, 274,074 of shares of common stock (13,704 shares as adjusted for the May Stock Split), were issued resulting from cashless warrant exercises.