STOCKHOLDERS’ EQUITY |
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STOCKHOLDERS’ EQUITY | NOTE 10 - STOCKHOLDERS’ EQUITY
Preferred Stock
The Company has authorized preferred shares with a par value of $ per share. The Board of Directors is authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.
Series C Convertible Preferred Stock
On March 4, 2023, the Company filed a Certificate of Designation with the Wyoming Secretary of State, which established shares of the Company’s Series C Convertible Preferred Stock, with a Stated Value of $ per share.
The Company has the right to redeem the Series C Convertible Preferred Stock in accordance with the following schedule:
The Series C Convertible Preferred Stock will vote together with the common stock on an as-converted basis subject to the Beneficial Ownership Limitations (as set forth in the Certificate of Designation).
Each share of the Series C Convertible Preferred Stock is convertible, at any time and from time to time from and after the issuance at the option of the Holder thereof, into that number of shares of Common Stock (subject to Beneficial Ownership Limitations) determined by dividing the Stated Value of $1,200 of such share by the Conversion Price of $0.3202.
On March 4, 2022, the Company entered into a Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), whereby GHS agreed to purchase, in tranches, up to $700,000 of the Company’s Series C Convertible Preferred Stock in exchange for shares of Series C Convertible Preferred Stock.
On March 4, 2022, the Company issued to GHS the first tranche of 75% of the number of shares of common stock issuable upon conversion of the Series C Convertible Preferred Stock (the “GHS Warrant Shares”). The Company has agreed to register the shares of common stock issuable pursuant to the conversion of the Series C Convertible Preferred Stock and the GHS Warrant Shares. shares of Series C Convertible Preferred Stock, as well as commitment shares of shares of Series C Convertible Preferred Stock and warrant shares (the “GHS Warrant”). Warrant shares represent
GHS delivered gross proceeds of $266,000 to the Company (legal fees and a transaction fee charged by Spartan Capital were excluded).
On March 9, 2022, the Company entered a Securities Purchase Agreement with Proactive Capital Partners LP (“Proactive”), whereby Proactive agreed to purchase shares of Series C Preferred Stock.
The Company agreed to issue Proactive commitment shares of 75% of the number of shares of common stock issuable upon conversion of the Series C Convertible Preferred Stock (the “Warrant Shares”). The Company has agreed to register the shares of common stock issuable pursuant to the conversion of the Series C Convertible Preferred Stock and the Warrant Shares. shares of Series C Convertible Preferred Stock and warrant shares (the “Warrant”). Warrant shares represent
On March 9, 2022, the Company issued 290,000 to the Company (excluded were legal fees). shares of Series C Convertible Preferred stock to Proactive Capital Partners LP as per the Securities Purchase Agreement. Proactive delivered gross proceeds of $
On April 24, 2022, the Company issued the second tranche of 184,000 to the Company (legal fees and a transaction fee charged by Spartan Capital were excluded). shares of Series C Convertible Preferred Stock and warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $
On May 25, 2022, the Company issued the third tranche of 92,000 to the Company (legal fees and a transaction fee charged by Spartan Capital were excluded). shares of Series C Convertible Preferred Stock and warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $
On September 24, 2022, the Company issued the fourth tranche of 92,000 to the Company (legal fees and a transaction fee charged by Spartan Capital were excluded). shares of Series C Convertible Preferred Stock and warrant shares as per its Securities Purchase Agreement (the “GHS Securities Purchase Agreement”) with GHS Investments, LLC (“GHS”), of March 4, 2022. GHS delivered gross proceeds of $
On September 7, 2022, our wholly owned subsidiary, Bubblr Limited, entered into a new loan agreement (the “Loan Agreement”) with Mr. Morris for £434,089 (US$549,079 on September 30, 2024). In order to enter into the new loan, GHS Investments, LLC agreed to waive a prohibition on borrowing over $200,000 found in our Certificate of Designation for the Series C Preferred Stock, in exchange for our company issuing shares of common stock: shares of common stock to GHS and shares of common stock to Proactive. The resulting common shares were valued at $71,703, recorded as interest expense.
As a result of the above transactions, the Company received total net proceeds of $789,000, of which $721,275 has been allocated to the warrants and Series C Preferred Stock based on the warrants’ fair market values on each contract date, with the residual loss of $28,043 allocated to day-one loss on warrant liability associated with the March 2022 issuances, and excess proceeds of $95,768 allocated to the Series C Preferred Stock related to the April, May, and September 2022 issuances.
As of September 30, 2024, and December 31, 2023, the Company had shares of Series C Preferred Stock issued and outstanding.
Common Stock
The Company has authorized common shares with a par value of $ per share. Each common share entitles the holder to one vote, in person or by proxy, on any matter on which action of the corporation’s stockholders is sought.
During the year ended December 31, 2023, the Company issued the following unregistered securities:
During the nine months ended September 30, 2024, the Company did not issue unregistered securities.
On September 30, 2024, and December 31, 2023, the Company had shares of common stock issued and outstanding.
The above securities were issued in reliance on the exemption from registration provided by Section 4.(a)(2) of the Securities Act of 1933, as amended, and in reliance on the exception from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.
Warrants
The Company identified conversion features embedded within warrants issued during the nine months ended September 30, 2023. The Company has determined that the conversion feature of the Warrants represents an embedded derivative since the conversion price includes a reset provision that could cause adjustments in redemption value and the number of shares issued upon exercise (see Note 9—Warrant Liability).
A summary of activity during the nine months ended September 30, 2024, follows:
The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2024:
As of September 30, 2024, the intrinsic value of the warrants is $ , as the price of the Company’s stock was below the warrant exercise price.
2022 Equity Incentive Plan
On April 1, 2023, the Company granted executives, management, and a non-executive director options to purchase our common stock as compensation for time served. The Board of Directors determines the terms of the stock option grants, which are consistent with our 2022 Equity Incentive Plan.
Our stock option grant general policy is that options vest 40% after 90 days of service, and the remaining options vest monthly over two years. The maximum term is ten years.
The total intrinsic value of options on September 30, 2023, is zero because the closing stock price was below the weighted average exercise value.
The Company recognized compensation costs of $ and $ for the nine months ended September 30, 2024 and 2023, respectively. The Company recognized compensation costs of $ and $ for the three months ended September 30, 2024 and 2023, respectively.
As of September 30, 2024, there were $95,403 of unrecognized compensation costs related to non-vested share options, which we will realize over the next seven months.
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