Note 15 — Subsequent Events

Redemption Agreement

 On January 22, 2025, the Company, and an institutional accredited investor (the “Holder”), holding the warrants (the “Warrants”) exercisable for 2,446,634 shares of common stock of the Company (assuming a cash exercise of the warrants), entered into a warrant redemption and cancellation agreement (the “Redemption Agreement”).The Company and the Holder entered into the securities purchase agreements dated April 1, 2024, and July 16, 2024, respectively (the “Agreements”), pursuant to which the Company issued the Warrants.

Pursuant to the Redemption Agreement, the Company paid to the Holder $379,082.79 (the “Redemption Price”) in consideration of the redemption and cancellation of the 100% of the Warrants. Upon the Holder’s receipt of the Redemption Price, the Warrants were redeemed, cancelled and terminated in full.  

Additionally, the Company and the Holder confirmed in the Redemption Agreement, that prior to January 22, 2025, (1) the First Warrants (as defined in the Agreements) issued by the Company to the Holder in February 2024 and July 2024 were fully exercised by the Holder, and (2) the Second Warrant (as defined in the Agreement) issued by the Company to the Holder in February 2024 was cancelled and extinguished in its entirety due to the full repayment of the Note (as defined in such warrant).

Securities Purchase Agreement

On February 4, 2025 (the “Closing Date”), the Company and an institutional investor (the “Investor”) entered into a Securities Purchase Agreement (the “SPA”), pursuant to which the Company issued to the Investor: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on February 4, 2027 (the “Initial Note”); and (ii) sixteen (16) warrants (“Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (“Incremental Notes” and together with the Initial Note, the “Notes”). The purchase price paid by the Investor under the SPA for the Initial Note and Incremental Warrants was $4,963,750.

The $4,963,750 in gross proceeds from the offering was used by the Company to pay-off certain indebtedness of the Company, pay certain outstanding fees and expenses (including expenses of the offering, and fees payable to the placement agent and advisors), acquisitions and general corporate purposes. Of the proceeds from the offering, $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreements with Cedar Advance, LLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreement with Arin Funding, LLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured promissory notes with an accredited investor.

Interest on the Note commenced accruing on the issuance date thereof at an annual rate of 12% per annum computed on the basis of a 360-day year and the actual number of days elapsed in each month and is payable in arrears for on the first trading day of each fiscal quarter with the first such date being April 1, 2025. Interest may be paid in certain limited conditions in shares of the Company’s Common Stock and shall otherwise be payable in cash.

Executive Equity Awards

On February 5, 2025, the Company issued the CEO an aggregate of 2,933,219 unregistered shares of common stock of the Company, par value $0.0001 per share (the “Shares”) as a compensation for the services rendered pursuant to his employment agreement with the Company.

 The Company issued the Shares to the CEO in reliance on exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), available to the Company under Section 4(a)(2) of the Securities Act due to the fact that the issuance did not involve a public offering of securities.

Equity Issuances

On January 17, 2025, the Company issued 399,562 shares of common stock as an exercise of a prefunded warrant which was part of the securities purchase agreement with an institutional accredited investor, Abri Advisors, Ltd., a corporation organized under the laws of Bermuda, agreed to on November 1, 2024.

On February 20, 2025, the Company entered into a consulting agreement pursuant to which the Company agreed to issue 1,723,530 shares of the Company’s common stock for services rendered.

On February 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue 300,000 and 200,000 shares of the Company’s common stock, respectively, for services rendered.

On March 10, 2025, the company issued 39,780 shares to team leaders pursuant to independent contractor agreements signed in 2024.

On April 7, 2025, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 250,000 shares of the Company’s common stock for services rendered.

In Q1 2025, the holder of our Senior Secured promissory notes converted 1,676,189 shares of the Company’s common stock as part of their First warrants and principal and interest conversions.

In Q1 2025, the company utilized their ATM and sold a total of 7,668,442 shares of the Company’s common stock.

The remaining 373,215 shares were made up of small quantity transactions that are not material enough to disclose separately, a portion of these shares are shares that vested from RSU’s grants.