Item 2. Unregistered Sales of Equity Securities
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
The
following is a summary of all of the unregistered securities that the Company has sold from July 1, 2020 to September 30,
2020.
Issuance
of Stock, Convertible Notes and Warrants for Financing Purposes
●
Between
August 21, 2020 and September 29, 2020, the Company entered into securities purchase agreements (the “August Agreements”)
with several investors. Pursuant to the August Agreements, the Company issued (i) an aggregate of 5,212,753 shares of common
stock at a purchase price of $9.25 per share and (ii) warrants to purchase up to 25% of the number of shares of common stock
sold to such investors, up to an aggregate of 1,303,186 shares of common stock, at an exercise price of $9.25 per share, for
aggregate proceeds of $48,217,965.25.
●
On
July 2, 2020, the Company entered into a Purchase Agreement with Credit Suisse Capital LLC, pursuant to which the Company
sold 2,162,163 shares of the Company’s common stock at a purchase price of $9.25 per share for an aggregate purchase
price of $20,000,007.75. On September 29, 2020, the Company issued to Credit Suisse Capital LLC a warrant to purchase 540,000
shares of common stock at an exercise price of $9.25 per share.
●
Between
January 1, 2020 and October 30, 2020, the Company issued convertible notes with a principal
balance of approximately $3.05 million. In connection with such convertible notes, the
Company issued (i) 62,500 shares of its common stock, (ii) a warrant to purchase an aggregate
of 55,172 shares of its common stock at an initial exercise price of $9.00 per share,
and (iii) a warrant to purchase 142,118 shares of common stock (which, as of September
30, 2020, was amended to cover 359,475 shares) at an initial exercise price of $7.74
per share (which, as of September 30, 2020, was amended to $3.06 per share). As of September
30, 2020, we are in negotiations with the holder of the warrant covering 55,172 shares
of common stock that may result in the reduction of the exercise price of such holder’s
outstanding warrant and a corresponding increase in the number of shares subject to the
warrant. Any such increase in the number of shares subject to the warrant would equal
no more than 1% of our fully-diluted shares following the offering.
Issuance
of Stock for Business Acquisitions
●
Issuance
of Unregistered Common Stock for Acquisition of PEC.
○
Between
August 2018 and October 30, 2020, pursuant to the Evolution Share Exchange Agreement
(as described below) and related agreements, the Company has issued an aggregate of 5,980,217
shares of its common stock in exchange for 77,321,381 shares of PEC, its majority-owned
subsidiary as follows: (i) between January 1, 2020 and October 30, 2020, the Company
has issued 2,753,819 shares of its common stock in exchange for 40,063,435 shares of
its subsidiary PEC; (ii) during the year ended December 31, 2019, the Company issued
2,503,333 shares of its common stock in exchange for 19,756,548 shares of PEC; and (iii)
during the year ended December 31, 2019, the Company issued 983,114 shares of its common
stock in exchange for 21,057,249 shares of PECs.
Issuance
of Common Stock and Options for Services Provided
●
Issuance
to Service Providers.
○
Between
January 1, 2020 and October 30, 2020, the Company issued (i) to various service providers,
371,000 shares of its common stock in connection with consulting agreements for the provision
of services, (ii) to three individual consultants, an aggregate of 500,000 as bonus compensation,
and (iii) for the provision of financial advisory services, 55,000 shares of common stock
and a warrant to purchase 275,000 shares of common stock with an initial exercise price
of $5.00 per share
70
None
of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. The Company
believes the offers, sales, and issuances of the above securities were exempt from registration under the Securities Act by virtue
of Section 4(a)(2) of the Securities Act because the issuance of securities to the recipients did not involve a public offering
or in reliance on Rule 701 because the transactions were pursuant to compensatory benefit plans or contracts relating to compensation
as provided under such rule.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not
applicable.
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