SkyAI, Inc. 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock and warrants are traded on the Nasdaq Capital Markets under the symbol “STSS” and “STSSW”, respectively. Our common stock and warrants commenced trading on April 14, 2022. Holders of Record As of March 28, 2024 there were 15,670,898 common shares issued and outstanding and approximately 131 shareholders of record. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, this number is not indicative of the total number of stockholders represented by these stockholders of record. Dividend Policy We have not paid any and have no present intention of paying any dividends on our capital stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. As a result, we anticipate that only appreciation of the price of our common stock, if any, will provide a return to investors for at least the foreseeable future. Use of Proceeds from the Sale of Registered Securities On April 13, 2022, the Company’s initial public offering (“IPO”) was declared effective by the SEC pursuant to which the Company issued and sold an aggregate of 3,750,000 units, each consisting of one share of common stock and two warrants, to purchase one share of common stock for each whole warrant, with an initial exercise price of $4.25 per share and a term of five years. In addition, the Company granted Aegis Capital Corp., as underwriter a 45-day over-allotment option to purchase up to 15% of the number of shares included in the units sold in the offering, and/or additional warrants equal to 15% of the number of warrants included in the units sold in the offering, in each case solely to cover over-allotments, which the Aegis Capital Corp. partially exercised with respect to 1,125,000 warrants on April 19, 2022. The IPO generated aggregate gross proceeds of approximately $16 million. After deducting underwriting discounts, commissions and offering costs incurred by us of approximately $1.7 million the net proceeds from the offering were approximately $14.2 million. Aegis Capital Corp. acted as the underwriter of the offering. No offering costs were paid or are payable, directly, or indirectly, to our directors or officers, to persons owning 10% or more of any class of our equity securities, or to any of our affiliates. 18 There has been no material change in the expected use of the net proceeds from our IPO as described in our final prospectus filed with the SEC on April 15, 2022. Upon receipt, the net proceeds from our IPO were held in cash and cash equivalents. As of December 31, 2023, we have used the net proceeds from the IPO for working capital, acquisition of the Hungary facility and capital expenditures. On February 3, 2023, we completed a securities purchase agreement (“Offering”) with institutional investors and received net proceeds from the Offering were approximately $3.2 million, net of $600,000 in fees relating to the placement agent and other offering expenses. The Offering was priced at the market under Nasdaq rules. In connection with the Offering, we issued 2,248,521 units at a purchase price of $1.69 per unit. Each unit consists of one share of common stock and one non-tradable warrant exercisable for one share of common stock at a price of $.64 as adjusted down from $1.56. The warrants have a term of five years from the issuance date. The net proceeds were used to fund operations and capital expenditures. (See Note 8 to the Consolidated Financial Statements) On September 29, 2023, the Company completed two simultaneous offerings and received aggregate gross proceeds of approximately $5.6 million, before expenses to the placement agent and other offering expenses of $716,000. The net proceeds are being used to fund operations and capital expenditures. a. The first offering, the securities purchase agreement offering (the “Shelf Offering”) with institutional investors and the Company resulted in the Company receiving net proceeds from the Shelf Offering and the sale of pre-funded of approximately $2.5 million, includes the value of the pre-funded warrants recorded in APIC, net of $362,000 in fees relating to the placement agent and other offering expenses. The Shelf Offering was priced at the market under Nasdaq rules. In connection with the Shelf Offering, the Company issued 3,618,521 shares of common at a purchase price of $0.64 per unit and 800,000 pre-funded warrants at $0.639 per pre-funded warrants. The exercise price of the pre-funded warrants will be $0.001 per share. b. The second offering, the securities purchase agreement offering (“Private Placement”) with institutional investors and the Company received net proceeds from the Private Placement of approximately $2.4 million, net of $354,000 in fees relating to the placement agent and other offering expense. In connection with the Private Placement, the Company issued: (i) 2,581,479 PIPE Shares (or PIPE Pre-Funded Warrants in lieu thereof) and (ii) PIPE Warrants (non-trading) to purchase 8,750,003 shares of our common stock, at a combined purchase price of $1.074 per unit (or $1.073 per pre-funded unit). The PIPE Warrants have a term of five and one-half (5.5) years from the issuance date and are exercisable for one share of common stock at an exercise price of $0.64. The net proceeds, after reflecting par value, has been recorded in Additional Paid in Capital of $1.6 million and with respect to the PIPE Warrants recorded as a liability under ASC 815 of $985,204. On October 16, 2023, the Company filed an S-1 (Resale) Registration Statement in connection with the Private Placement and on October 26, 2023 the S-1 went effective. At December 31, 2023 the warrant liability is $1,036,875. (See Note 8 to the Consolidated Financial Statements) Recent Sales of Unregistered Securities During 2023, we completed two Private Placements and issued an aggregate of 4,830,000 shares being a) 2,248,521 relating to the February 2023 offering and b) 2,581,479 shares relating to the September 2023 offering. No unregistered equity securities were issued during the period April 19,2022 through December 31, 2022 except for the 235,000 shares issued in connection with services provided to the Company. During 2023, the Company issued 1,065,000 stock options at exercise prices ranging from $.82 to $1.37. During 2022, the Company issued 367,500 stock options at exercise prices ranging from $1.08 to $4.25. 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 as transactions by an issuer not involving any public offering, or in reliance on Rule 701 promulgated under Section 3(b) of the Securities Act because the transactions were pursuant to compensatory benefit plans or contracts relating to compensation as provided under Rule 701. Securities Authorized for Issuance under Equity Compensation Plans The information required by this item with respect to securities authorized for issuance under equity compensation plans is set forth in Part III, Item 11 of this Annual Report on Form 10-K. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our shares of common stock or other securities during our fiscal years ended December 31, 2023 and 2022. Certain of our Officers and Directors purchased shares on the open market as reflected in their Section 16b filings (Form 4). Item 6. [Reserved]