RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 13 — RELATED PARTY TRANSACTIONS

Convertible Debt

On December 22, 2022, the Company issued to Alpha, an 8% Senior Convertible Debenture in the aggregate principal amount of $3,300,000 for a purchase price of $3,000,000 pursuant to the terms of a Securities Purchase Agreement, dated December 21, 2022. As of December 31, 2023, the remaining principal balance was $1,418,922. During the nine months ended September 30, 2024, the remaining principal balance of this Debenture was converted into 103,876 shares of common stock of the Company, at a weighted average price of $13.66 per share.

On February 27, 2024, the Company issued to Alpha, an 8% Convertible Debenture in the principal amount of $550,000 for a purchase price of $500,000 less expenses pursuant to the terms of a Securities Purchase Agreement dated February 26, 2024. During the nine months ended September 30, 2024, a principal amount of $50,979 of this Debenture was converted into 7,846 shares of common stock of the Company, at a weighted average price of $6.50 per share. As of September 30, 2024 this Debenture had a remaining principal balance of $499,021, and was convertible, at any time, and from time to time, at Alpha’s option, into shares of common stock of the Company, at a price equal to $6.50 per share, subject to adjustment as described in the Debenture and other terms and conditions described in the Debenture.

See Note 8 – Convertible Debt for additional information concerning convertible debt – related party transactions.

Warrants

On May 22, 2020, as a commitment fee, the Company issued warrants to Alpha for the purchase of common stock. As of September 30, 2024, 141 of these warrants remain outstanding and exercisable, and may be exercised in whole or in part, at any time before May 22, 2025. During the three and nine months ended September 30, 2024 and September 30, 2023, there were no exercises of this warrant.

On December 22, 2022, in conjunction with the issuance of a debenture to Alpha, the Company issued to Alpha a warrant to purchase 50,000 shares of the Company’s common stock. As of September 30, 2024, the exercise price of this warrant was $6.50. This warrant may be exercised by Alpha, in whole or in part, on or after June 22, 2023 and at any time before June 22, 2028, subject to certain terms and conditions described in the warrant. During the three and nine months ended September 30, 2024, Alpha partially exercised this warrant to purchase 20,460 and 31,998 shares respectively, of the Company’s common stock at a weighted average exercise price of $13.00, for total cumulative proceeds to the Company of $416,000. During the three and nine months ended September 30, 2023, there were no exercises of this warrant.

On February 27, 2024, in conjunction with the issuance of a debenture to Alpha, the Company issued to Alpha a warrant to purchase 18,001 shares of the Company’s common stock. This warrant may be exercised by Alpha, in whole or in part, at any time before February 27, 2029, subject to certain terms and conditions described in the warrant. During the three and nine months ended September 30, 2024, there were no exercises of this warrant.

As of September 30, 2024, the exercise price of all of the above warrants issued to Alpha was $6.50.

The above warrants are included in equity on the Company’s condensed consolidated balance sheets (see Note 12 – Stockholders’ Equity (Deficit)), except for 2,314 shares of the warrant issued on February 27, 2024, which was reclassified to liabilities as of September 30, 2024, until shareholder approval is obtained for the company to issue the shares (see Note 7 - Warrant Liabilities).