|6 Months Ended|
Jun. 30, 2019
NOTE 13 – EQUITY
In January 2018, all 500,000 shares of subscribed Series A convertible preferred stock were converted into 970,988 shares of common stock at a conversion price of $0.55 per share. The Company recorded a non-cash loss on conversion of approximately $34,000 based on the market value of the common stock on the conversion date.
The Series A convertible preferred stock accrues an annual dividend of 6% until conversion. The preferred stock is convertible, along with any accrued dividends, into common stock at a twenty-five percent discount to the selling price of the common stock in a qualified offering, as defined in the subscription agreement. In addition, the Company has the ability to force the conversion of preferred stock at such time the Company has a market capitalization in excess of $50 million for ten consecutive trading days. In such event, the conversion price shall be a 25% discount to the average closing price of the Company’s common stock over the ten trading days prior to the Company’s notice of its intent to convert.
During the six months ended June 30, 2019, the Company sold 799,995 shares of common stock at a price of $3.25 per share, resulting in total proceeds of $2.6 million. During the same period in 2018, the Company sold 10,111,578 shares of common stock, at prices ranging from $0.50 to $1.30 per share, resulting in total proceeds of approximately $8.5 million.
During the six months ended June 30, 2019 and 2018, the Company issued 97,136 and 1,000,000 common shares, respectively, associated with previously issued subscriptions on common stock with a value of approximately $169,000 and $370,000, respectively.
During the six months ended June 30, 2018, the Company issued 1,313,901 common shares in exchange for services rendered by third-parties or to otherwise settle outstanding obligations. Based on the market value of the common stock on the dates of issuance, the Company recorded non-cash losses on these settlements of approximately $959,000. Also during such period, the Company issued 1,679,486 common shares to retire $1,175,000 of promissory notes. Based on the market value of the stock on the retirement dates, the Company recorded non-cash losses of approximately $918,000. No common shares were issued during the same period in 2019 to settle obligations or retire promissory notes.
As previously disclosed in Note 3 – Acquisitions, the Company issued 1,000,000 shares of common stock to the owners of Harvest.
As previously disclosed in Note 4 – Investments, the Company issued 500,000 shares of common stock to purchase a minority interest in Terrace.
As previously disclosed in Note 12 – Debentures Payable, during the six months ended June 30, 2019, the holder of the $17.5M Debentures converted $2,350,000 of principal and approximately $278,000 of accrued interest into 1,156,379 shares of common stock.
As further disclosed in Note 14 – Stock Options, during the six months ended June 30, 2019 and 2018, 358,446 and 300,000 shares of common stock, respectively, were issued in connection with the exercise of stock options.
As further disclosed in Note 15 – Warrants, during the six months ended June 30, 2019 and 2018, warrants to purchase 666,104 and 1,235,768 shares of common stock were exercised.
Common Stock Issuance Obligations
At June 30, 2019, the Company was obligated to issue 752,260 shares of common stock, valued at $2,080,000, as part of the purchase price for MediTaurus, as previously disclosed in Note 3 – Acquisitions. These shares will be subsequently issued in the third quarter of 2019.
At December 31, 2018, the Company was obligated to issue: (a) 79,136 shares of common stock, valued at approximately $95,000, related to the settlement of a previously issued promissory note with a principal balance of $50,000 and accrued interest of $1,454; and (b) 18,000 shares of common stock, valued at approximately $74,000, for the payment of rent for a leased property in Massachusetts for the months of September 2018 through January 2019. Such shares were subsequently issued in the first quarter of 2019.
At June 30, 2018, the Company was obligated to issue: (a) 264,317 shares of common stock to in connection with the acquisition of iRollie LLC, as disclosed in Note 3 – Acquisitions; (b) 32,083 shares of common stock in connection with the exercise of a warrant, (c) 2,001,641 shares of common stock to settle $1,951,600 of vendor invoices; and (d) 9,281 shares of common stock, valued at approximately $20,000, for the payment of rent on a leased property in Massachusetts for the months of May and June 2018. All such shares were issued subsequent to the June 30, 2018 quarter end.
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef