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Subsequent Events | 12 Months Ended
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Dec. 31, 2024
Subsequent Events |
Subsequent Events |
23. | Subsequent Events
On January 3, 2025, the Board of Directors (the “Board”) of the Company approved the appointment of Michael McLaren as the Company’s Chief Executive Officer and on January 5, 2025, the Company entered into an employment agreement with Mr. McLaren (the “Employment Agreement”) to employ Mr. McLaren in such capacity for an initial term of two (2) years, which Employment Agreement provides for an annual base salary of $250,000 which shall be increased to $400,000 upon the closing of a capital event which cures the Company’s stockholders’ equity deficiency with Nasdaq, a signing bonus of $50,000 payable within thirty (30) days of the Employment Agreement’s effective date, a long-term incentive bonus with a range of between two (2) to four (4) times Mr. McLaren’s then-base salary, subject to approval by the Company’s Board of Directors. On January 3, 2025, the Board of Directors (the “Board”) appointed Michael McLaren as a director of the Company. Mr. McLaren will serve until the date of the Company’s 2025 Annual Meeting of Shareholders (the “2025 Annual Meeting”) and until his successor is duly elected and qualified. As an employee director, Mr. McLaren will not participate in the Company’s non-employee director compensation program. Mr. McLaren is subject to a one-year post-termination non-compete and non-solicit of employees and clients. Mr. McLaren is also bound by confidentiality provisions. On January 8, 2025 (the “Effective Date”), the Company entered into a binding Letter of Intent (the “Letter of Intent”) with New Asia Holdings, Inc., a Nevada corporation (“NAHD”) and Olenox Corp., a Wyoming corporation and a wholly owned subsidiary of NAHD (“OLOX” and, together with NAHD, the “Seller”). Upon the terms of and subject to the satisfaction of the conditions set forth in the Letter of Intent, and in one or more definitive agreements to be entered into among the Company and Seller, the Company will acquire all of the issued and outstanding securities of NAHD in exchange for shares of Company stock (the “Transaction”). The Letter of Intent provides that the shares of Company stock to be issued in the Transaction shall be valued at $1.00 per share and the shares of NAHD to be acquired in the Transaction shall be valued at $0.20 per share. The Letter of Intent is a binding agreement that represents the basis on which the parties will proceed to consummate the Transaction pursuant to one or more written definitive, long-form agreements. The Letter of Intent provides that the parties will use their good faith best efforts to prepare and enter into such definitive agreement(s) incorporating the terms of the Letter of Intent with an effective date of January 15, 2025 and to close the Transaction as soon as possible after receipt of necessary approvals. Closing of the contemplated transaction is contingent upon completion of satisfactory due diligence, execution of definitive transaction documents, receipt of all necessary consents and approvals, and certain other customary closing conditions. The Letter of Intent further provides that either party may terminate the Letter of Intent (i) after completion of due diligence, in the event such party determines that the information provided is unacceptable for any reason, or (ii) after January 28, 2025, by giving written notice to the other of the notifying party’s desire to terminate the Letter of Intent. The foregoing terms and conditions are subject to change based upon the negotiation and execution of definitive agreement(s) by and among the Company and Seller. Closing of the Transaction will be subject to the terms and conditions of the definitive agreement(s), including completion of due diligence and satisfaction or waiver of closing conditions. There can be no assurance that definitive agreement(s) will be entered into or that the proposed Transaction will be consummated. There exists a material relationship between the Company and the Seller in that Michael McLaren serves as the Company’s chief executive officer and chairman of the board, as well as NAHD’s sole officer and director and as OLOX’s chief executive officer and a member of its board of directors. On January 16, 2025, the Company appointed Jim Pendergast as the Company’s Chief Operating Officer and entered into an employment agreement with Mr. Pendergast (the “Employment Agreement”) to employ Mr. Pendergast in such capacity for an initial term of two (2) years, which Employment Agreement provides for an annual base salary of $200,000, a restricted stock grant under the Company’s Stock Incentive Plan for 200,000 shares of the Company’s common stock, vesting quarterly on a pro-rata basis over the next eighteen (18) months of continuous service, and an annual performance bonus of up to 20% of Mr. Pendergast’s then-base salary, payable in cash and/or equity, as determined by Company’s by the Company’s Board of Directors. Mr. Pendergast brings over 25 years of leadership in corporate operations, having served as CEO, CFO, and COO across public and private companies in the energy, construction, manufacturing, and agricultural sectors. He has expertise in mergers and acquisitions, corporate restructuring, and equity and debt financing. His previous roles include COO at MGO Systems Ltd., where he oversaw more than 50 construction projects during his time there, and CEO/CFO at Paramount Structures Inc., leading its acquisition and financial restructuring. As CEO of FP Genetics Inc., he refocused the company on profitable growth. Earlier, at Agrium Inc., he managed large-scale business development projects and represented the company to investors. He has also served on the boards of several companies, providing leadership in corporate governance, strategic planning, and financial management. He holds an MBA in International Business and Finance from McMaster University and a BA (Honors) in Political Studies and Economics from Queen’s University. Mr. Pendergast is subject to a one-year post-termination non-compete and non-solicit of employees and clients. Mr. Pendergast is also bound by confidentiality provisions. On January 29, 2025, the Company entered into a mutual release and discharge agreement (the “Mutual Release”) with SG DevCorp. pursuant to SG DevCorp. forgiving and releasing from our obligations to them under that certain promissory note, dated August 9, 2023, in the principal amount of $908,322.95 and in respect of $815,522 of inter-company advances from SG DevCorp. to the Company in exchange for the Company forgiving $394,329 of inter-company debt owed to the Company by us and for SG DevCorp.(which has already been written off) transferring 276,425 shares (the “Shares”) of SG DevCorp.’s Common Stock owned by the Company, with the Company no longer being a shareholder of SG DevCorp. On February 2, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and between the Company and NAHD pursuant to which NAHD will be merged into a to-be-formed subsidiary of the Company (the “Merger”). Following this Merger, the NAHD operating subsidiaries will be indirect, wholly owned subsidiaries of the Company. As merger consideration, the Company will issue four million (4,000,000) Series A non-voting convertible preferred shares of the Company, par value $1.00 (the “Preferred Shares”), to the NAHD shareholders. Each Preferred Share has the right to convert into shares of common stock of the Company at a ratio of 1 to 15 (each Preferred Share will convert into 15 shares of common stock of the Company), provided, however, that such conversion is subject to the approval of a majority of the Company’s common shareholders. The Merger Agreement contain customary representations, warranties, and covenants. The Merger Agreement also contain conditions to the completion of the Merger including the filing of the articles of incorporation and/or organization for the merger subsidiaries, and the adoption of board resolutions and/or sole member resolutions by the merger subsidiaries approving the Merger. There are no assurances that the parties will satisfy all of the conditions to the merger. The parties expect to complete these transactions as soon as practicable following the satisfaction or waiver of the condition to the Merger. On February 26, 2025, the Company received a listing decision from The Nasdaq Stock Market LLC (“Nasdaq”) on behalf of the Nasdaq Hearings Panel (the “Panel”) indicating that the Company has evidenced compliance with the minimum equity standard set forth in Listing Rule 5550(b)(1) (the “Equity Rule”) and all other applicable criteria for continued listing on The Nasdaq Capital Market. Accordingly, the previously disclosed listing matter has been closed, and the Company’s securities will remain listed on Nasdaq. To regain compliance with the Equity Rule, the Company proposed a merger with Olenox Corp., a diversified energy company based in Texas that operates in three vertically integrated business units: Oil & Gas, Energy Services, and Energy Technologies (the “Olenox Merger”). On February 6, 2025, the Company informed the Panel that the Company had completed the first planned stage of the Olenox Merger, which served to increase stockholders’ equity by approximately $60 million. Based on the information presented and publicly disclosed, the Panel determined that the Company has satisfied the Equity Rule. In its communications with the Panel, the Company further advised that the conversion of the preferred stock issued in the transaction is subject to the Company’s receipt of shareholder approval for the issuance of the underlying common shares and, upon such issuance, will result in a change of control of the Company. The Company plans to file an initial listing application for the combined entity and to evidence compliance with Nasdaq’s initial listing criteria upon completion of the change of control aspect of the transaction. During March 2025, the Company issued 56,659 shares of common stock for previously vested restricted stock units. On March 6, 2025, the Company closed an ELOC Securities Purchase Agreement (the “ELOC Purchase Agreement”) with Tysadco Partners LLC (“Purchaser”), with an effective date of February 25, 2025, whereby the Company has the right, but not the obligation, to sell to the Purchaser, and the Purchaser is obligated to purchase, up to an aggregate of $100 million (the “Commitment Amount”) of newly issued shares (the “ELOC Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The Company does not have a right to commence any sales of Common Stock to the Purchaser under the ELOC Purchase Agreement until the time when all of the conditions to the Company’s right to commence sales of Common Stock to the Purchaser set forth in the ELOC Purchase Agreement have been satisfied, including that a registration statement of such shares is declared effective by the SEC and the final form of prospectus is filed with the SEC (the “Commencement Date”). Over the period ending on the earlier of December 31, 2026, or the date on which the Purchaser shall have purchased ELOC Shares pursuant to the ELOC Purchase Agreement for an aggregate purchase price of the Commitment Amount, the Company will control the timing and amount of any sales of ELOC Shares to the Purchaser. Actual sales of shares of Common Stock to the Purchaser under the ELOC Purchaser Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations made by the Company as to appropriate sources of funding. The purchase price of the shares of ELOC Shares that the Company elects to sell to the ELOC Purchaser pursuant to the ELOC Purchase Agreement will be equal to the lowest traded price of Common Stock during the five (5) business days prior to the applicable closing date multiplied by 90%. In no event may the Company issue to the Purchaser under the ELOC Purchase Agreement more than the 4.99% of the total number of the Company’s shares of Common Stock issued and outstanding immediately prior to the execution of the ELOC Purchase Agreement (the “Applicable Exchange Cap”), unless the Company obtains stockholder approval to issue shares of Common Stock in excess of the Applicable Exchange Cap. In any event, the ELOC Purchase Agreement provides that the Company may not issue or sell any shares of Common Stock under the ELOC Purchase Agreement if such issuance or sale would breach any applicable Nasdaq rules. The ELOC Purchase Agreement prohibits the Company from directing the Company to purchase any shares of Common Stock if those shares, when aggregated with all other shares of Common Stock then beneficially owned by the Purchaser (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended), would result in the ELOC Purchaser beneficially owning more than 4.99% of the outstanding Common Stock. The ELOC Purchase Agreement provides that the Company shall file a registration statement registering the resale of the maximum number of ELOC Shares as shall be permitted by applicable law within five (5) business days following the date of the ELOC Purchase Agreement. The Company shall use its best efforts to have the registration statement declared “effective” within 120 days of the date of the ELOC Purchase Agreement. On March 6, 2025, the Company closed and issued a promissory note (the “Note”) in favor of Tysadco Partners LLC (the “Lender”), with an effective date of February 25, 2025, in the aggregate principal amount up to $1,875,000 (the "Principal”), and an accompanying Securities Purchase Agreement (the “SPA”). All outstanding Principal and interest shall be due on November 30, 2025 (the “Maturity Date”). The Note was purchased for up to $1,500,000, representing an original issue discount of twenty-five percent (25%), equal to $375,000 if the Note is fully funded. The Note shall bear interest at twelve percent (12%) interest per annum. The Lender has the right to convert all or any portion of the then-outstanding Principal and interest into fully paid and non-assessable shares of common stock of the Company, par value $0.01 per share (the “Conversion Shares”). The per share conversion price into which the Principal and interest converts shall be fifty cents ($0.50) per share. Among others, the following shall be considered events of default under the Note (each an “Event of Default”): if the Company fails to pay the Principal or interest when due under the Note; if the Company fails to issue Conversion Shares to the Lender upon exercise by the Lender of the conversion rights under the Note; or if the Company breaches any covenant, agreement, or other term or condition of the Note or the accompanying SPA. Upon the occurrence of an Event of Default, then the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the Event of Default, and a daily penalty of $500 will accrue until the default is remedied. If the Company has not obtained approval from the holders of the Company’s Common Stock, as required by applicable rules and regulation of Nasdaq, the Company shall not issue any number of shares of Common Stock under the Note that would exceed 4.99% of the shares of Common Stock outstanding as of the date of the Note. Additionally, the Company shall not effect any conversion of the Note, and the Lender shall not have the right to convert any portion of the Note or receive shares of Common Stock as payment of interest hereunder to the extent that after giving effect to such conversion or receipt of such interest payment, the Lender, together with any affiliates thereof, would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt of shares as payment of interest. In connection with the issuance of the Note and the SPA, the Company will issue 294,000 shares of Common Stock (the “Commitment Shares”) as additional consideration for the purchase of the Note.

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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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