Item 2. Unregistered Sales of Equity Securities
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS
Common
Shares Issued for Services
During the
six months ended June 30, 2022, the Company issued a total of 408,957 shares of its common stock for services rendered and to
be rendered. These shares were valued at $340,950, the fair market values on the grant dates using the reported closing share prices on
the dates of grant, and the Company recorded stock-based compensation expense of $254,923 for the six months ended June 30,
2022 and reduced accrued liabilities of $30,000 and recorded prepaid expense of $56,027 as
of June 30, 2022 which will be amortized over the rest of corresponding service periods.
Subsequent Event Issuances
On July 25, 2022, the
Company and Wenzhao “Daniel” Lu entered into and closed a Debt Settlement Agreement and Release pursuant to which Mr. Lu converted
approximately $2.4 million principal and approximately $0.4 million unpaid interest owed under the Line of Credit into 4,443,990 shares
of common stock of the Company at a per share price of $0.65. As a result of the conversion, the total principal amount outstanding under
the Credit Line amounted to $0.
On July 25, 2022, the
Company and Fsunshine Trading PTE. Ltd. (“Fsunshine”) entered into a Conversion Agreement pursuant to which Fsunshine converted
its Convertible Notes in the amount of approximately $3.7 million, including interest, into 5,736,452 shares of common stock of the Company
at a per share price of $0.65.
The offers, sales, and issuances of the securities
described above were deemed to be exempt from registration under the Securities Act of 1933 in reliance on Section 4(a)(2) of the Securities
Act of 1933 or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities
in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution
thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these
transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to
information about us.
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ITEM 3. DEFAULTS UPON
SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
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