APPLIED ENERGETICS, INC.
For the period ended Dec 31, 2024. Filed Mar 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 28, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-26.
0001213900-24-026107
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-28.
0001013762-25-003924
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 66 previous paragraphs and 70 current paragraphs.
41 unchanged; 19 reworded; 10 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
In March 2025, the company moved to the next phase of its strategic collaboration with Kord Technologies, Inc., a wholly owned subsidiary of KBR, to explore the potential development and integration of an advanced pulsed laser system with Kord’s FIREFLYTM High Energy Laser Weapon System (HELWS). This phase is to begin with the purchase of a specially modified Firefly HELWS unit from Kord which the company can use to work on the development and integration of its proprietary Ultrashort Pulse technology in its newly opened Battle Lab, with the assistance of Kord personnel under a related services agreement.
Current report
Applied Energetics had previously entered into a Memorandum of Understand (MOU) with Kord, effective October 28, 2024, to further the development and deployment of Applied Energetics’ ultrashort pulsed laser (USPL) technology for defense and national security applications. The MOU outlines key areas of cooperation, including joint research and development, integration of Applied Energetics’ USPL technologies into an existing high-energy laser directed energy platform, and the exploration of new opportunities to enhance both companies’ product portfolios.
Current report
In February 2025, we announced the opening of our new Battle Lab, which is also expected to provide the capacity to manufacture and integrate advanced lasers as Applied Energetics makes the anticipated technology transition to the next stage of its lifecycle. Over the coming months, the company intends to install and demonstrate multiple ultrashort pulse lasers with varying wavelengths against relevant target packages. In July 2024, the company exercised its option to lease more than 5,000 square feet of additional space at the University of Arizona Tech Park to create the Battle Lab. The company took the option to lease this additional space under the June 7, 2023, amendment (the “2023 Amendment”) to its Lease Agreement with Campus Research Corporation, as Landlord. With this expansion, the company now occupies, in the aggregate, approximately 26,000 sq. ft. of space at the Arizona Tech Park.
Current report
Revenue decreased by approximately $205,000, or 7.8%, to approximately $2,427,000 for the year ended December 31, 2024, from $2,631,000 for the year ended December 31, 2023. The decrease in revenue was primarily the result of a contract modification which resulted in a decrease in a contract’s price and an increase in a contract’s term, offset by an additional one-year continuation for an existing contract and a new contract during 2024.
Current report
Cost of revenue increased by approximately $842,000, or 132.10%, to approximately $1,480,000 for year ended December 31, 2024, from $638,000 during the year ended December 31, 2023. This increase was primarily attributable to an increase in the cost of materials, supplies and direct labor cost incurred in connection with recent contract modifications.
Current report
Research and development expenses increased approximately $5,300, or 2.3%, to $239,000 for the year ended December 31, 2024, compared to approximately $234,000 for the year ended December 31, 2023, primarily due to an increase in labor and material cost associated with continued development.
Current report
The new administration and related changes in the structure and operations of the federal government are introducing new challenges for our operations and financial projections. It is difficult to forecast the effect that recently introduced tariffs will have on our ability to source raw materials, supplies, and equipment needed to continue our operations both for the performance of our ongoing contractual obligations and our internal research and development efforts. Moreover, the cut to funding and reductions in federal government personnel can have a significant impact on our cash flows and ability to continue operating. Many of these cuts are proposed to the Departments of Defense and Homeland Security budgets which are the focus of much of our business development efforts.
Current report
Certain mitigating factors could blunt any potential impact of these changes on our industry. The DOD and others in the administration have indicated that funding for innovation and novel technologies will continue to be a priority, and directed energy has been discussed as part of this trend. Also, many of the cuts are being challenged in court and, in some cases, reversed either because of judicial rulings or policy reversals. However, it is difficult to predict precisely where funds will be cut or allocated, and even a general reduction in force can make administrative functions, such as finalizing contracts and government payment processing, challenging. These factors could severely impact our cash flows and our ability to continue operating.
Current report
The amendment also granted the company an option (the “Option”) over 6,458 rentable square feet (5,520 usable square feet) of manufacturing space. The option was effective, at a price of $2,690.83 per month, from August 1, 2023 through February 1, 2024 but was extended to July 31, 2024. The term of occupancy in the new office space and the option both began August 1, 2023.
Current report
On July 3, 2024, we exercised the Option to support the company’s investment in a new Battle Lab. With this expansion, the company now occupies, in the aggregate, approximately 26,000 sq. ft. of space. Our aggregate rent expense, including common area maintenance costs, was approximately $318,000 and $212,000 for 2024 and 2023, respectively. This included the cost of the option until it was exercised and the rent on the Battle Lab space thereafter. These facilities are adequate for our current and expected level of operations.
Removed paragraphs (6)
Previous report
Following successful completion of work on the STTR Phase I contract with the U.S. Army and the research grant by the U.S. Marine Corps in 2022, AE was awarded additional contracts in 2023, and payments due for the final deliverables under the Marine Corp grant have been transferred to a new contract executed during the first quarter of 2024, all as detailed below.
Previous report
Income Taxes
Previous report
Deferred tax assets and liabilities are recognized currently for the future tax consequences attributable to the temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized.
Previous report
Revenue increased by approximately $1,323,000, or 101%, to approximately $2,631,000 for the year ended December 31, 2023, from $1,308,000 for the year ended December 31, 2022. The increase represents two additional contracts that we received and commenced performing in May 2023 and August 2023.
Previous report
Cost of revenue increased by approximately $332,000, or 109%, to approximately $638,000 for year ended December 31, 2023, from $306,000 during the year ended December 31, 2022. This represents costs directly associated with the grant that the company commenced in June 2022 and the additional contracts that were commenced in May 2023 and August 2023.
Previous report
Research and development expenses decreased approximately $87,000, or 27%, to $234,000 for the year ended December 31, 2023, compared to approximately $321,000 for the year ended December 31, 2022, primarily due to transitioning personnel from research and development to commercialization activities due to additional contracts awarding during the year. This transition is reflected in a portion of the increase in cost of revenue.
Reworded paragraphs (19)
Previous wording
Gregory J. Quarles serves as our President and Chief Executive Officer, Christopher Donaghey as our Chief Operating and Financial Officer, and Dr. Stephen W. McCahon as our Chief Science Officer. AE has continued to expand its technical capabilities with the addition of employees, consultants and contractors, and agreements with several of the leading laser and optics universities in the country. The team at Applied Energetics continued to expand during 2023 and into early 2024, with the addition of six new employees, including a senior scientist, two laser technicians, one engineering project manager, a senior advisor, and, most recently, a director of new product innovation. AE also works with a team of world-class contractors to strengthen our compliance, IT, technical staff, human resources and public relations, supporting the research and development in the laboratory.
Current wording
Christopher Donaghey serves as our President and Chief Executive Officer (and as our Principal Accounting and Financial Officer), and Dr. Stephen W. McCahon serves as our Chief Science Officer. AE has continued to expand its technical capabilities with the addition of employees, consultants and contractors, and agreements with several of the leading laser and optics universities in the country. AE also works with a team of world-class contractors to strengthen our compliance, IT, technical staff, human resources and public relations, supporting the research and development in the laboratory.
Previous wording
AE owns and protects intellectual property that is integral and necessary for the development of Ultrashort Pulse (“USP™”) Lasers, Laser Guided Energy (“LGE®”) and Direct Discharge Electrical products for military and commercial applications. AE currently owns 25 patents and an additional 11 Government Sensitive Patent Applications (“GSPA”). These GSPA’s are held under secrecy orders of the US government and allow the company greatly extended protection rights, including having no expiration date until such time as they are no longer classified after which they will have the normal 20-year patent protection. The company also has nine pending patent applications and one provisional patent application which is undergoing conversion to its non-provisional form. We continue to file patent applications as we deem appropriate to protect our intellectual property and enhance our competitive advantage.
Current wording
AE owns and protects intellectual property that is integral and necessary for the development of Ultrashort Pulse (“USP™”) Lasers, Laser Guided Energy (“LGE®”) and Direct Discharge Electrical products for military and commercial applications. AE currently owns 26 patents and an additional 11 Government Sensitive Patent Applications (“GSPA”). These GSPA’s are held under secrecy orders of the US government and allow the company greatly extended protection rights, including having no expiration date until such time as they are no longer classified after which they will have the normal 20-year patent protection. The company also has eight pending patent applications and one provisional patent application which is undergoing conversion to its non-provisional form. We continue to file patent applications as we deem appropriate to protect our intellectual property and enhance our competitive advantage.
Previous wording
Effective March 12, 2024, a grant previously awarded to Applied Energetics, Inc. from a U.S. Department of Defense customer has been transitioned into a contract. The original grant had a two-year period of performance. The new contract supersedes the May 2022 grant and carries a ceiling value of $1,217,535 under a base period of performance through November 11, 2024 and a 12-month unfunded option period that ends November 11, 2025. The company intends to provide additional information in a Current Report on Form 8-K upon approval from the government agency.
Current wording
Effective March 12, 2024, a grant previously awarded to Applied Energetics, Inc. from the Department of the Navy, Office of Naval Research was transitioned into a contract. The original grant from May 2022 had a two-year period of performance. The new contract supersedes the grant and carries a ceiling value of $1,217,535 under a base period of performance through November 11, 2024 and a 12-month unfunded option period that ends November 11, 2025. On September 4, 2024, the company received a funding increase on this contract of $237,647 bringing the total funding on the contract to $1,455,182.
Previous wording
Effective August 23, 2023, Applied Energetics executed a contract with the Department of the Navy, Office of Naval Research with an aggregate contract price of $1.99 million payable over two years as the company performs its obligations under the contract. The objective of the contract is to develop a high-peak and high-average power USP optical system. The system is expected to demonstrate effects compatible with multiple Navy platforms and missions with an attractive size, weight, and power-cooling footprint. The company’s continuing development efforts in collaboration with ONR signify the importance of sustained development and maturation of USP-based directed energy systems to support the Navy’s technological priorities.
Current wording
Effective August 23, 2023, Applied Energetics executed a contract with the Department of the Navy, Office of Naval Research with an aggregate contract price of $1.99 million payable over two years as the company performs its obligations under the contract. The objective of the contract is to develop a high-peak and high-average power USP optical system. The system is expected to demonstrate effects compatible with multiple Navy platforms and missions with an attractive size, weight, and power-cooling footprint. The company’s continuing development efforts in collaboration with ONR signify the importance of sustained development and maturation of USP-based directed energy systems to support the Navy’s technological priorities. Work on this contract is ongoing.
Previous wording
Effective May 15, 2023, Applied Energetics executed a Phase II Small Business Technology Transfer (STTR) contract with the U.S. Army at an aggregate contract price of $1.148 million payable over two years as the company performs its obligations thereunder, with the first year currently funded. The objective of this Phase II award is to further the development and testing of an IR system utilizing technologies that were investigated under the US Army Phase I STTR contract which the company was awarded in May 2022. This Phase II contract award follows a successful Phase I which established a computational concept with physical modeling and simulation to establish the feasibility of an IR system. Phase I was performed in collaboration with the James C. Wyant College of Optical Sciences at the University of Arizona. The company has continued its work under the contract, and provided all required reports, since its execution.
Current wording
Effective May 15, 2023, Applied Energetics executed a Phase II Small Business Technology Transfer (STTR) contract with the U.S. Army at an aggregate contract price of $1.148 million payable over two years as the company performs its obligations thereunder, with the first year currently funded. The objective of this Phase II award is to further the development and testing of an IR system utilizing technologies that were investigated under the US Army Phase I STTR contract which the company was awarded in May 2022. This Phase II contract award followed a successful Phase I which established a computational concept with physical modeling and simulation to establish the feasibility of an IR system. Phase I was performed in collaboration with the James C. Wyant College of Optical Sciences at the University of Arizona. The company has continued its work under the contract, and provided all required reports, since its execution.
Previous wording
AE’s team continues to be invited to, and complete, multiple briefings focused on our capabilities and our submissions and to submit contract proposals. Following the closures of government agencies during the Covid -19 pandemic, the government has been reviewing and processing proposals and holding in-person meetings for briefings where appropriate. However, this positive action by the agencies could be reversed in the event of a resurgence of Covid or other national health emergency. Any changes to reinstate the closures or work-from-home orders could again hamper the ability of the AE team to schedule on-site briefings for our proposals undergoing review.
Current wording
AE’s team continues to be invited to, and complete, multiple briefings focused on our capabilities and our submissions and to submit contract proposals.
Previous wording
Neither of the US federal budgets for 2023 or 2024 were approved by Congress by the start of the corresponding U.S. federal government fiscal year, which is October 1 of the preceding year. In both 2022 and 2023, Congress passed, and the president signed, continuing resolutions (“CRs”), to extend federal government funding. specified dates. The final Defense Appropriations Bill for fiscal 2023 was signed into law on December 29, 2022 and included increases in areas of particular interest to the company.
Current wording
Neither of the US federal budgets for fiscal 2024 or 2023 were approved by Congress by the start of the corresponding U.S. federal government fiscal year, which is October 1 of the preceding year. In both 2024 and 2023, Congress passed, and the president signed, continuing resolutions (“CRs”), to extend federal government funding. specified dates. The final Defense Appropriations Bill for fiscal 2023 was signed into law on December 29, 2022 and included increases in areas of particular interest to the company.
Previous wording
For fiscal year 2024, which started on October 1, 2023, the National Defense Authorization Act (NDAA) was delayed and finally approved on December 22, 2023 (HR 2670), but the Defense Appropriations bill was not approved at that time. The NDAA sets defense spending policies, and the appropriations bills fund government spending. This impacts all proposals under review by the Department of Defense. On September 30, 2023, President Biden signed a Continuing Resolution (CR), HR 5860, which extended the government operations through November 17, 2023, and he then signed three further CRs, including HR 6363 on November 11, 2023 extending through January 19, 2024, HR 2872 extending through March 1, 2024, and HR 7463, extending through March 8, 2024, as to four of the 12 annual budget bills, and through March 22, 2024 for the remaining eight. On March 23, 2024, the Defense Appropriations Bill was passed and signed by President Biden which will ensure the US government is funded through September 30, 2024 and that new government contracts can be funded during the 2024 fiscal year. Delays and uncertainty around funding may delay allocation of funds or pose a payment risk for the company with respect to any grants or agreements under which we are already working.
Current wording
For fiscal year 2025, which started on October 1, 2024, the National Defense Authorization Act (NDAA) was delayed, but on December 23, 2024, then-President Biden signed the 2025 NDAA into law. The NDAA sets defense spending policies, while the separate appropriations bills comprising the federal budget fund government spending, including spending on defense and homeland security. This impacts all proposals under review by the Department of Defense. On September 26, 2024, in the absence of an enacted federal budget, then-President Biden signed a Continuing Resolution (CR), HR 9747, which extended government operations through December 20, 2024. He then signed a second CR for FY25 on December 21, 2024, extending funding for the federal government through March 14, 2025. A full year Continuing Resolution, H.H. 1968, was passed and signed into law by President Trump on March 15, 2025, and extends through September 30, 2025.
Previous wording
General and administrative expenses increased approximately $2,642,000, or 43%, to $8,772,000 for the year ended December 31, 2023, compared to approximately $6,130,000 for the year ended December 31, 2022, primarily due to a decrease of approximately $20,000 in insurance expenses, an increase in salaries and employee benefits of approximately $1,050,000, in consulting for stock-based comp $1,224,000, in depreciation expense of approximately $54,000, in rent $135,000, and in legal of $198,000.
Current wording
General and administrative expenses increased approximately $738,000, or 8.4%, to $9,510,00 for the year ended December 31, 2024, compared to approximately $8,772,000 for the year ended December 31, 2023, primarily due to an increase in salaries and employee benefits of approximately $720,000 mainly due to non-cash compensation, an increase in software and licenses of approximately $40,000, an increase in depreciation expense of approximately $70,000 and increase of rent of $204,000, partially offset by a decrease of approximately $377,000 in professional and consulting expenses.
Previous wording
Selling and Marketing expenses increased approximately $63,000, or 20%, to $384,000 for the year ended December 31, 2023, compared to approximately $321,000 for the year ended December 31, 2022, primarily due to the continuation of business development activities through our Master Services Agreement with Westpark Advisors as well as the addition of other consultants in this field.
Current wording
Selling and Marketing expenses decreased approximately $9,500, or 2.5%, to $375,000 for the year ended December 31, 2024, compared to approximately $384,000 for the year ended December 31, 2023, primarily due to the continuation of business development activities through our Master Services Agreement with Westpark Advisors as well as other consultants in this field.
Previous wording
Other income increased approximately $48,000, or 2,400%, to $46,000 for the year ended December 31, 2023, compared to other expenses of $2,000 for the year ended December 31, 2022, primarily due to holding cash in short-term money market funds with Franklin Templeton Institutional Services.
Current wording
Other income decreased approximately $44,000, or 95.3%, to $2,000 for the year ended December 31, 2024, compared to other expenses of $46,000 for the year ended December 31, 2023, primarily due to unused funds in cash equivalents reclassed for development purposes.
Previous wording
Our operations in 2023 resulted in a net loss of approximately $7,350,000, an increase of approximately $1,578,000, or 27%, compared to the approximately $5,772,000 net loss for the year ended 2022, primarily due to increases in general and administrative and selling and marketing expense, partially offset by higher revenue and a decrease in research and development expenses.
Current wording
Our operations in 2024 resulted in a net loss of approximately $9,174,000, an increase of approximately $1,824,000, or 24.8%, compared to the approximately $7,350,000 net loss for the year ended 2023, primarily due to increases in general and administrative and research and development expense, partially offset by lower revenue and a decrease in selling and marketing expenses.
Previous wording
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At December 31, 2023, the company had total current assets of $2,035,656 and total current liabilities of $927,382, resulting in a working capital surplus of $1,108,274. At December 31, 2023, we had $1,319,526 of cash and cash equivalents, a decrease of $4,320,782 from $5,640,308 at December 31, 2022.
Current wording
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At December 31, 2024, the company had total current assets of $664,779 and total current liabilities of $732,418, resulting in a working capital deficit of $67,639. At December 31, 2024, we had $164,812 cash and cash equivalents, a decrease of $1,154,714 from $1,319,526 at December 31, 2023.
Previous wording
During the year ended December 31, 2023, the net cash outflow from operating activities was $3,450,653. This amount was comprised primarily of our net loss of $7,350,435. This was offset by non-cash stock-based compensation expense of $3,493,397, amortization of prepaid assets of $202,354, depreciation and amortization expense of $127,639, and the amortization of right of use assets of $143,602. Additionally, net cash used from changes in assets and liabilities totaled $67,210. This included an increase in accounts receivable $214,643, increase in prepaid and deposits of $257,918, and a decrease in operating lease liabilities of $112,050. This is offset by an increase in accounts payable of $195,988, an increase in deferred revenue of $308,908 and accrued expenses and compensation of $12,505.
Current wording
During the year ended December 31, 2024, the net cash outflow from operating activities was $5,092,690. This amount was comprised primarily of our net loss of $9,174,958. This was offset by non-cash stock-based compensation expense of $3,768,819, amortization of prepaid assets of $224,625, depreciation and amortization expense of $ 218,907, and the amortization of right of use assets of $214,690. Additionally, net cash used from changes in assets and liabilities totaled $344,773. This included a decrease in accounts receivable of $231,953 and accrued expenses and compensation of $22,643. This was offset by a decrease in deferred revenue of $308,908, prepaid and deposits of $51,113, and a decrease in operating lease liabilities of $184,871 and a decrease in accounts payable of $54,477.
Previous wording
During the year ended December 31, 2023, the net cash outflow from investing activities was $369,267. This was for the purchase of equipment.
Current wording
During the year ended December 31, 2024, the net cash outflow from investing activities was $98,847. This was for the purchase of equipment.
Previous wording
During the year ended December 31, 2023, net cash outflow from financing activities was $500,862, which consisted mainly of repayment of our note payable of $555,541, payment of $136,671 to the IRS for tax withholding related to the share settlement of RSUs issued to employees, offset by $155,541 in proceeds from note payable for insurance premium financing and $35,809 in proceeds from the exercise of options.
Current wording
During the year ended December 31, 2024, net cash provided by financing activities was $4,036,823, which consisted mainly of repayment of our note payable of $141,977, payment of $82,300 to the IRS for tax withholding related to the share settlement of RSUs issued to employees, offset by $4,171,601 in proceeds from sale of common stock and $89,499 in proceeds from the exercise of options.
Previous wording
The company’s existence depends upon management’s ability to develop profitable operations. Management is devoting a significant portion of its efforts to developing additional business and raising capital, as needed, but cannot be certain that these efforts will be successful. Management’s business development efforts may not result in profitable operations. To fund its research and development and marketing efforts, the company’s management continues to explore possible financing opportunities through discussions with investment bankers and private investors. The company may not be successful in its effort to secure additional financing on terms it considers favorable. The accompanying consolidated financial statements do not include any adjustments that might result should the company be unable to continue as a going concern.
Current wording
The company’s existence depends upon management’s ability to develop profitable operations. Management is devoting a significant portion of its efforts to developing additional business and raising capital, as needed, but cannot be certain that these efforts will be successful. Management’s business development efforts may not result in profitable operations. To fund its research and development and marketing efforts, the company’s management continues to explore possible financing opportunities through discussions with investment bankers and private investors. The company may not be successful in its effort to secure additional financing on terms it considers favorable. The accompanying consolidated financial statements do not include any adjustments that might result should the company be unable to continue as a going concern. In January and February 2025, the company raised approximately $6 million through the private placement of shares of its common stock, par value, $0.001 per share, some of which were underlying pre-funded common stock purchase warrants, in a private sale to individual purchasers at a price of $0.75 per share (or $0.749 per underlying share for pre-funded warrants), all to accredited, sophisticated investors
Previous wording
The Series A Preferred Stock has a liquidation preference of $25.00 per share. The Series A Preferred Stock bears dividends at an initial rate of 6.5% of the liquidation preference per share per annum, which accrues from the date of issuance, and is payable quarterly. We have not paid dividends commencing with the quarterly dividend due August 1, 2013 and, as a result, the dividend rate has increased to 10% per annum and will remain at that level until such failure is cured. Dividends due as of December 31, 2023, and March 25, 2024, were approximately $363,000 and $373,000, respectively.
Current wording
The Series A Preferred Stock has a liquidation preference of $25.00 per share. The Series A Preferred Stock bears dividends at an initial rate of 6.5% of the liquidation preference per share per annum, which accrues from the date of issuance, and is payable quarterly. We have not paid dividends commencing with the quarterly dividend due August 1, 2013 and, as a result, the dividend rate has increased to 10% per annum and will remain at that level until such failure is cured. Dividends due as of December 31, 2024, and March 26, 2025, were approximately $397,000 and $408,000, respectively.
Previous wording
The holders of the Series A Preferred Stock have a right to put the stock to the company for an aggregate amount equal to the liquidation preference (approximately $340,000 plus unpaid dividends of $363,000 as of December 31, 2023, in the event of a change in control. Dividends are payable in: (i) cash, (ii) shares of our common stock (valued for such purpose at 95% of the weighted average of the last sales prices of our common stock for each of the trading days in the ten trading day period ending on the third trading day prior to the applicable dividend payment date), provided that the issuance and/or resale of all such shares of our common stock are then covered by an effective registration statement or (iii) any combination of the foregoing. As of December 31, 2023, there were 13,602 shares of Series A Preferred Stock outstanding.
Current wording
The holders of the Series A Preferred Stock have a right to put the stock to the company for an aggregate amount equal to the liquidation preference approximately $340,000 plus unpaid dividends of $397,000 as of December 31, 2024, in the event of a change in control. Dividends are payable in: (i) cash, (ii) shares of our common stock (valued for such purpose at 95% of the weighted average of the last sales prices of our common stock for each of the trading days in the ten trading day period ending on the third trading day prior to the applicable dividend payment date), provided that the issuance and/or resale of all such shares of our common stock are then covered by an effective registration statement or (iii) any combination of the foregoing. As of December 31, 2024, there were 13,602 shares of Series A Preferred Stock outstanding.