Airship AI Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
AISP$1.79+2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001654954-24-010635
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001654954-24-014445
Item 2. 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 70 previous paragraphs and 71 current paragraphs.
35 unchanged; 24 reworded; 11 added; 11 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 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 (11)
Current report
On June 22, 2024, we entered into an extension agreement with Platinum Capital Partner, Inc. to extend the maturity date of a $2,000,000 senior secured convertible promissory note to June 22, 2025. In consideration for entering into the extension agreement, we issued to Platinum 232,360 shares of common stock in payment of all interest and extension fees through June 22, 2025. During the three months ended September 30, 2024, the Company issued 219,763 shares of common stock related to the conversion of $500,000 of the senior secured convertible note.
Current report
On September 3, 2024, we closed an offering of $8 million of shares of common stock and common stock purchase warrants and received net proceeds of approximately $7.3 million, after deducting the estimated offering expenses payable by us, including the placement agent fees. We intend to use the net proceeds from the offering for working capital and general corporate purposes, including cost of goods sold purchases, personnel and product development.
Current report
On September 27, 2024, the Company entered into a Master Loan Agreement with Mr. Huang, whereby he may provide additional funding of up to $1,500,000 under certain terms and conditions. The agreement provides for interest of 6%. The Company agreed to pay interest for the 2024 advances of $11,913 and issued warrants to purchase up to 220,000 shares of common stock. The warrants have an exercise price of $2.36 per share, are exercisable immediately upon issuance and will expire in five years following the date of issuance. There are no outstanding advances under this Master Loan Agreement as of September 30, 2024.
Current report
The other expense for the three months ended September 30, 2023 related to (i) the loss in change of the fair value of the convertible note of $401,000; (ii) interest expense of $39,000; and offset by (iii) other income of $2,000.
Current report
The other expense for the nine months ended September 30, 2023 related to (i) the loss in change of the fair value of the convertible note of $401,000; (ii) interest expense of $58,000; and (iii) other expense of $7,000.
Current report
The net loss for the nine months ended September 30, 2023 included noncash expenses of $3,462,000 of which stock-based compensation was $2,616,000.
Current report
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. We have incurred losses from operations in the past few years and had an accumulated deficit of $24.8 million as of September 30, 2024. As disclosed in Note 1, we closed an $8 million public offering with approximately $7.3 million in net proceeds. In November 2024, we analyzed our cash requirements and operations at least through November 2025 and determined that, based upon our current available cash and operations, we have no substantial doubt about our ability to continue as a going concern. Our assessment of the period of time through which its financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results could vary as a result of its near and long-term future capital requirements that will depend on many factors.
Current report
On February 2, 2024, we issued an amended and restated senior secured convertible promissory note to Platinum in the principal amount of $2,000,000. Interest accrued on the Platinum convertible note at the rate of 6% per annum calculated on the basis of 360 days. At the option of Platinum, the $2,000,000 principal amount of the note plus any accrued but unpaid interest is convertible into shares of common stock at a conversion price per share equal to the lower of (i) $3.69717, subject to appropriate adjustment as provided in the note, and (ii) 65% of the VWAP of the common stock for the five trading days immediately prior to any conversion, but in no event below $2.27518, subject to appropriate adjustment as provided in the note. The note contains “weighted average” anti-dilution protection for issuances of shares of common stock or common stock equivalents at a price less than the conversion price then in effect.
Current report
In connection with the issuance of the Platinum convertible note, we issued to Platinum an amended and restated common stock purchase warrant dated February 2, 2024, to purchase 189,334 shares of the Company’s common stock at an exercise price per share of $3.69717. On March 18, 2024, Platinum exercised the Platinum warrant and received 137,367 shares of common stock. Platinum forfeited 51,967 shares.
Current report
On June 22, 2024, we entered into an extension agreement related to the Platinum convertible note. The extension agreement extended the due date of the note to June 22, 2025. In consideration for entering into the extension agreement, we issued to Platinum 232,360 shares of restricted common stock in payment of all interest and extension fees through June 22, 2025. Subject to the terms and conditions of such extension agreement, for a period commencing on December 22, 2024 and ending at the close of business on December 22, 2025, Platinum has a one-time put right to have us purchase all or a portion of Platinum’s 232,360 restricted shares at $2.27518 per share. We granted piggyback registration rights to Platinum.
Current report
The obligations under the Platinum convertible note are secured by a blanket lien on all our assets pursuant to an Amended and Restated Security Agreement dated February 2, 2024 and are guaranteed pursuant to an Amended and Restated Guaranty dated February 2, 2024. We also concurrently entered into an Amended and Restated Subordination Agreement.
Removed paragraphs (11)
Previous report
On June 27, 2023, BYTS entered into the Merger Agreement with Merger Sub and Airship AI. The Merger Agreement was amended on September 22, 2023. On December 21, 2023, the merger with BYTS closed. Airship AI Holdings, Inc. became the accounting acquiror and the combined entity became the successor SEC registrant under the ticker symbol “AISP”.
Previous report
Other expense for the three months ended June 30, 2023 related primarily to interest and other expense of $19,000.
Previous report
Other expense for the six months ended June 30, 2023 related primarily to interest of $19,000 and other expense of $10,000.
Previous report
The net loss for the six months ended June 30, 2023 included noncash expenses of $2,775,000 primarily related to $2,136,115 stock compensation expense for warrants issued to founders.
Previous report
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. We formally evaluated our liquidity and cash position most recently in August 2024 when preparing our June 30, 2024 unaudited financial statements. During this process we concluded, based upon existing assets and liabilities, our order backlog and projections, plus the ability to borrow in short term loans from our founder, that we would be able to operate at least for the next twelve months. We have received purchase orders from various federal government agency customers totaling over $16 million from which we shipped and started receiving cash in the first and second quarters of 2024.
Previous report
As of June 30, 2024, we had cash of approximately $227,000 and accounts receivable of approximately $3,440,000 which we expect to collect in the near term after quarter end. We have incurred losses from operations over the past few years and had an accumulated deficit of $30,979,000 as of June 30, 2024. We also had at June 30, 2024 a working capital deficit of approximately $6,712,000. The net working capital deficit includes a couple of items that are expected to require limited cash outlays in the future, including the current deferred revenue totaling $3,791,970 and convertible debt totaling $2,675,919, which we expect to be converted to equity. We have primarily funded our operations from operating cash, proceeds from debt borrowings and advances from founders.
Previous report
Our contractual cash obligations as of June 30, 2024 (excluding debt financing arrangements below) are summarized in the table below:
Previous report
On November 2, 2023, we issued senior secured convertible promissory notes for $600,000 to two private investors. At the option of the holders, the notes are convertible into cash, common stock or a combination of cash and stock. On March 5, 2024, the two private investors converted the debt to equity.
Previous report
Mr. Huang has committed to providing additional temporary funding if it is necessary.
Previous report
We believe that our cash on hand, funding from the completion of the merger, results of operations and financing transactions will be sufficient to fund our operations for the next twelve months.
Previous report
Equity financing, if obtained, could result in dilution to our then-existing stockholders and/or require such stockholders to waive certain rights and preferences. If such financing is not available on satisfactory terms, or is not available at all, we may be required to delay, scale back, or eliminate the development of business opportunities and our operations and financial condition may be materially adversely affected.
Reworded paragraphs (24)
Previous wording
As a result of the merger, the Company entered into the following transactions that were measured at fair value and vary quarterly with the share price and other items. Any change is non-cash and is recorded as a gain or loss in other income (expense). See Note 14– Fair Value Measurements for more information.
Current wording
As a result of the merger, we entered into the following transactions that were measured at fair value and vary quarterly with the share price and other items. Any change is non-cash and is recorded as a gain or loss in other income (expense). See Note 14– Fair Value Measurements for more information.
Previous wording
At the merger closing, we assumed 515,000 private placement warrants and 16,184,612 public warrants. On June 3, 2024, we permanently reduced the exercise price of such warrants from $11.50 per share to an exercise price of $7.80 per share. The purpose of this reduced exercise price was to potentially raise proceeds received from the exercise of such warrants, if any, for working capital and general corporate purposes. As of June 30, 2024, there were 515,000 private placement warrants and 16,159,012 public warrants outstanding. See Note 12– Private Placement and Public Warrants for more information.
Current wording
At the merger closing, we assumed 515,000 private placement warrants and 16,184,612 public warrants. On June 3, 2024, we permanently reduced the exercise price of such warrants from $11.50 per share to an exercise price of $7.80 per share. The purpose of this reduced exercise price was to potentially raise proceeds received from the exercise of such warrants, if any, for working capital and general corporate purposes. As of September 30, 2024, there were 515,000 private placement warrants and 16,159,012 public warrants outstanding.
Previous wording
Net Revenues — Net revenues for the three months ended June 30, 2024 increased $3,631,000 to $6,401,000 as compared to $2,770,000 for the three months ended June 30, 2023, as a result of increased product sales. We received purchase orders from various federal government agency customers totaling over $13 million from which we partially shipped in the three months ended June 30, 2024.
Current wording
Net Revenues — Net revenues for the three months ended September 30, 2024 increased $484,000 to $2,868,000 as compared to $2,384,000 for the three months ended September 30, 2023, as a result of increased product sales. We received purchase orders from various federal government agency customers totaling over $16 million from which we partially shipped in the three months ended September 30, 2024.
Previous wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the three months ended June 30, 2024, cost of sales increased $798,000 to $1,895,000 as compared to $1,097,000 for the three months ended June 30, 2023. The increase was due to higher product sales. Gross profit increased due to product mix, with reduced equipment purchases and increased Outpost AI sales during the three months ended June 30, 2024.
Current wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the three months ended September 30, 2024, cost of sales decreased $68,000 to $714,000 as compared to $782,000 for the three months ended September 30, 2023. The decrease was due to reduced equipment purchases and increased Outpost AI sales during the three months ended September 30, 2024.
Previous wording
Research and Development Expenses — Research and development expenses for the three months ended June 30, 2024 increased $38,000 to $703,000 as compared to $665,000 for the three months ended June 30, 2023.
Current wording
Research and Development Expenses — Research and development expenses for the three months ended September 30, 2024 increased $385,000 to $1,074,000 as compared to $689,000 for the three months ended September 30, 2023. The increase was due to increased expenses for product development.
Previous wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the three months ended June 30, 2024 decreased $1,265,000 to $2,827,000 as compared to $4,092,000 for the three months ended June 30, 2023. The decrease was due to (i) increased insurance costs of $142,000; (ii) increased professional fees of $291,000, primarily related to the merger and the Nasdaq listing; (iii) issuance of common stock for services of $199,000; (iii) increased other operating --expenses of $114,000; and offset by (iv) decreased stock based compensation of $2,011,000. The stock based compensation expense during the three months ended June 30, 2023 included warrants to purchase common stock issued to Victor Huang and Derek Xu on May 8, 2023 for 765,000 shares to each of the founders valued at $2,136,115.
Current wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the three months ended September 30, 2024 increased $525,000 to $2,667,000 as compared to $2,142,000 for the three months ended September 30, 2023. The increase was due to (i) increased insurance costs of $142,000; (ii) increased professional fees of $333,000, primarily related to the merger and the Nasdaq listing; and (iii) increased other operating expenses of $50,000.
Previous wording
Other Income Expense — Other income for the three months ended June 30, 2024 was $17,486,000 as compared to other expense of $19,000 for the three months ended June 30, 2023. Other expense for the three months ended June 30, 2024 consisted of (i) gain from change in fair value of warrant liability of $1,542,000; (ii) gain from change in fair value of earnout liability of $14,877,000; (iii) gain from change in fair value of convertible debt of $1,527,000; and offset by (iv) interest expense $421,000; and (v) other expense of $39,000.
Current wording
Other Income Expense — Other income for the three months ended September 30, 2024 was $7,801,000 as compared to other expense of $438,000 for the three months ended September 30, 2023. Other expense for the three months ended September 30, 2024 consisted of (i) gain from change in fair value of earnout liability of $5,512,000; (ii) gain from change in fair value of warrant liability of $2,471,000; (iii) gain from change in fair value of convertible debt of $371,000; (iv) other income of $16,000; offset by (v) loss on note conversion of $435,000; and (vi) interest expense of $134,000. The gain from change in fair value of various financial instruments was primarily the result of a lower stock price.
Previous wording
Net Income— Net income for the three months ended June 30, 2024 was $18,462,000 as compared to net loss of $3,103,000 for the three months ended June 30, 2023. The net income primarily related to noncash items of $16,894,000. Noncash items included (i) stock based compensation of $262,000; (ii) net amortization of operating lease right of use asset of $71,000; (iii) issuance of common stock for services of $198,000; (iv) noncash interest expense of $521,000; (v) gain from change in warrant liability of $1,542,000; (vi) gain from change in earnout liability of $14,877,000; and (vii) gain from change in fair value of convertible note of $1,527,000.
Current wording
*Net Income/Loss *— Net income for the three months ended September 30, 2024 was $6,214,000 as compared to net loss of $1,667,000 for the three months ended September 30, 2023. The net income is reduced by noncash items of $7,338,000, primarily the gain from the change in fair value of various financial instruments. Noncash items included (i) stock based compensation of $557,000; (ii) net amortization of operating lease right of use asset of $24,000; (iii) loss on note conversions of $434,000; offset by (iv) gain from change in fair value of warrant liability of $2,471,000; (v) gain from change in fair value of earnout liability of $5,571,000; and (vi) gain from change in fair value of convertible note of $370,000.
Previous wording
The net loss for the three months ended June 30, 2023 included noncash expenses of $2,775,000 primarily related to $2,136,115 stock compensation expense for warrants issued to founders.
Current wording
The net loss for the three months ended September 30, 2023 included noncash expenses of $687,000.
Previous wording
The following table sets forth key components of our results of operations during the six months ended June 30, 2024 and 2023.
Current wording
The following table sets forth key components of our results of operations during the nine months ended September 30, 2024 and 2023.
Previous wording
Net Revenues — Net revenues for the six months ended June 30, 2024 increased $11,267,000 to $16,976,000 as compared to $5,709,000 to for the six months ended June 30, 2023, as a result of increased product sales. We received purchase orders from various federal government agency customers totaling over $16 million from which we shipped in the six months ended June 30, 2024.
Current wording
Net Revenues — Net revenues for the nine months ended September 30, 2024 increased $11,751,000 to $19,844,000 as compared to $8,093,000 for the nine months ended September 30, 2023, as a result of increased product sales. We received purchase orders from various federal government agency customers totaling over $16 million from which we shipped in the nine months ended September 30, 2024.
Previous wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the six months ended June 30, 2024, cost of sales increased $6,611,000 to $9,842,000 as compared to $3,231,000 for the six months ended June 30, 2023. The increase was due to higher product sales and product mix with high equipment purchases during the six months ended June 30, 2024.
Current wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the nine months ended September 30, 2024, cost of sales increased $6,543,000 to $10,556,000 as compared to $4,013,000 for the nine months ended September 30, 2023. The increase was due to higher product sales and product mix with increased equipment purchases during the nine months ended September 30, 2024.
Previous wording
Research and Development Expenses — Research and development expenses for the six months ended June 30, 2024 increased $59,000 to $1,398,000 as compared to $1,339,000 for the six months ended June 30, 2023.
Current wording
Research and Development Expenses — Research and development expenses for the nine months ended September 30, 2024 increased $444,000 to $2,472,000 as compared to $2,028,000 for the nine months ended September 30, 2023. The increase was due to increased expenses for product development.
Previous wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the six months ended June 30, 2024 increased $237,000 to $6,162,000 as compared to $5,925,000 for the six months ended June 30, 2023. The increase was due to (i) increased insurance costs of $433,000; (ii) increased professional fees of $768,000, primarily related to the merger and the Nasdaq listing; (iii) issuance of common stock for services of $199,000; (iv) increased subscriptions of $164,000; (v) increased other operating expenses of $77,000; and offset by (vi) decreased stock based compensation of $1,878,000. The stock based compensation during the six months ended June 30, 2023 included warrants to purchase common stock issued to Victor Huang and Derek Xu on May 8, 2023 for 765,000 shares to each of the founders valued at $2,136,115.
Current wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the nine months ended September 30, 2024 increased $762,000 to $8,830,000 as compared to $8,068,000 for the nine months ended September 30, 2023. The increase was due to (i) increased insurance costs of $574,000; (ii) increased professional fees of $1,712,000, primarily related to the merger and the Nasdaq listing; (iii) increased other operating expenses of $4,000; and offset by (iv) decreased stock based compensation of $1,527,000. The stock based compensation during the nine months ended September 30, 2023 included warrants to purchase common stock issued on May 8, 2023 for 765,000 shares to each of the two founders valued at $2,136,000.
Previous wording
Other Expense — Other expense for the six months ended June 30, 2024 was $13,076,000 as compared to other expense of $29,000 for the six months ended June 30, 2023. Other expense for the six months ended June 30, 2024 consisted of (i) loss from change in fair value of warrant liability of $5,305,000; (ii) loss from change in fair value of earnout liability of $6,608,000; (iii) loss from change in fair value of convertible debt of $512,000; (iv) loss on note conversion of $159,000; (v) interest expense of $453,000; and (vi) other interest of $39,000.
Current wording
Other Expense — Other expense for the nine months ended September 30, 2024 was $5,275,000 as compared to other expense of $466,000 for the nine months ended September 30, 2023. Other expense for the nine months ended September 30, 2024 consisted of (i) loss from change in fair value of earnout liability of $1,096,000; (ii) loss from change in fair value of warrant liability of $2,834,000; (iii) loss from change in fair value of convertible debt of $142,000; (iv) loss on note conversion of $593,000; (v) interest expense of $587,000: and (vi) other expense of $23,000. The loss from change in fair value of various financial instruments was primarily the result of an increase in the stock price.
Previous wording
Net Loss — Net loss for the six months ended June 30, 2024 was $13,502,000 as compared to net loss of $4,815,000 for the six months ended June 30, 2023. The net loss primarily related to noncash items of $13,987,000. Noncash items included (i) depreciation of $2,000; (ii) stock based compensation of $531,000; (iii) net amortization of operating lease right of use asset of $151,000; (iv) issuance of common stock for services of $198,000; (v) noncash interest expense of $521,000; (vi) loss from change in warrant liability of $5,305,000; (vii) loss from change in earnout liability of $6,608,000; (viii) loss from change in fair value of convertible note of $512,000; and (ix) loss on note conversions of $159,000.
Current wording
Net Loss — Net loss for the nine months ended September 30, 2024 was $7,289,000 as compared to a net loss of $6,482,000 for the nine months ended September 30, 2023. The net loss primarily related to noncash items of $6,649,000. Noncash items included (i) depreciation of $2,000; (ii) stock based compensation of $1,088,000; (iii) net amortization of operating lease right of use asset of $175,000; (iv) issuance of common stock for services of $198,000; (v) noncash interest expense of $521,000; (vi) loss from change in fair value of warrant liability of $2,834,000; (vii) loss from change in fair value of earnout liability of $1,096,000; (viii) loss from change in fair value of convertible note of $142,000; and (ix) loss on note conversions of $593,000.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 was $4,147,000. This amount was primarily related to (i) net loss of $13,502,000; and (ii) net working capital reductions of $4,632,000; offset by (iii) noncash items of $13,987,000. Noncash items included (iv) depreciation of $2,000; (v) stock based compensation of $531,000; (vi) net amortization of operating lease right of use asset of $151,000; (vii) issuance of common stock for services of $198,000; (viii) noncash interest expense of $521,000; (ix) loss from change in warrant liability of $5,305,000; (x) loss from change in earnout liability of $6,608,000; (xi) loss from change in fair value of convertible note of $512,000; and (xii) loss on note conversions of $159,000.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 was $4,398,000. This amount was primarily related to (i) net loss of $7,289,000; and (ii) net working capital reductions of $3,758,000 (including a $2,059,000 reduction in deferred revenues); offset by (iii) noncash items of $6,649,000. Noncash items included (iv) depreciation of $2,000; (v) stock based compensation of $1,088,000; (vi) net amortization of operating lease right of use asset of $175,000; (vii) issuance of common stock for services of $198,000; (viii) noncash interest expense of $521,000; (ix) loss from change in warrant liability of $2,834,000; (x) loss from change in earnout liability of $1,096,000; (xi) loss from change in fair value of convertible note of $142,000; and (xii) loss on note conversions of $593,000.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2023 was $737,000. This amount was primarily related to (i) a net loss of $4,815,000; offset by (ii) net working capital increases of $1,303,000; and (iii) noncash charges of $2,775,000. Noncash charges included (iv) depreciation of $7,000; (v) stock based compensation- stock options of $274,000; (vi) stock based compensation- warrants of $2,136,000; and (vii) net amortization of operating lease right of use asset of $358,000.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2023 was $2,524,000. This amount was primarily related to (i) a net loss of $6,482,000; offset by (ii) depreciation of $11,000; (iii) stock based compensation of $2,616,000; (iv) net amortization of operating lease right of use asset of $513,000; (v) accelerated amortization of ROU asset of $265,000; (vi) gain from lease termination of $344,000; (vii) unrealized loss for increase in fair value of convertible promissory note of $401,000; and (viii) working capital changes of $496,000.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2024 was $1,240,000 and consisted of (i) proceeds from warrant exercise of $293,000; (ii) advances from founders of $800,000; and (iii) proceeds from stock option exercises of $147,000.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2024 was $7,780,000 and consisted of (i) proceeds from offering of $7,290,000; (ii) proceeds from exercise of warrants of $294,000; and (iii) proceeds from stock option exercises of $196,000.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2023 was $2,660,000 and consisted of (i) proceeds from convertible promissory note of $1,985,000; (ii) advances from founders of $1,100,000; and offset by (iii) repayment of small business loan and line of credit of $425,000.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2023 was $2,710,000 and consisted of (i) issuance of a senior secured convertible promissory note of $1,985,000; (ii) net advances provided by the founders of $1,150,000; and offset by (iii) the payoff of small business loan and line of credit of $425,000.
Previous wording
On June 22, 2023, we entered into a senior secured convertible promissory note with Platinum Capital Partners Inc. and received $2,000,000. As a condition of funding, we paid off three small notes and accounts payable totaling $374,000. At the option of the holder, the note is convertible into cash, common stock or a combination of cash and stock. We expect the convertible debt to be converted to equity. On June 22, 2024, we entered into an Extension Agreement related to the Platinum convertible note. The Extension Agreement extended the due date of the Platinum convertible note from June 22, 2024 to June 22, 2025.
Current wording
On June 22, 2023, we entered into a senior secured convertible promissory note with Platinum Capital Partners Inc. and received $2,000,000.
Previous wording
On July 13, 2023, we entered into a lease in Redmond, WA for 15,567 square feet of office and warehouse space which started October 1, 2023. The monthly payment is $25,000 per month. The lease expires October 31, 2027 and the monthly payment increases 3% on July 31, 2024 and each year thereafter. There is a one three year option to extend based on the fair market rate on October 31, 2027.
Current wording
On July 13, 2023, we entered into a lease in Redmond, WA for 15,567 square feet of office and warehouse space which started October 1, 2023. The monthly payment is $25,000 per month. The lease expires October 31, 2027 and the monthly payment increases 3% on July 31, 2024 and each year thereafter. There is a one three year option to extend the lease based on the fair market rate on October 31, 2027, which we expect to exercise.
Previous wording
On February 29, 2024, we extended a lease in Moorestown, North Carolina. The Company leases 3,621 square feet and the net monthly payment is $6,488. The lease expires on August 29, 2024.
Current wording
On February 29, 2024, we extended an office lease in Moorestown, North Carolina. We lease 3,621 square feet and the net monthly payment is $6,488. On August 27, 2024, we extended the lease to February 28, 2025.
Previous wording
We believe that the significant accounting policies described in “Note 2, Summary of Significant Accounting Policies” to our audited consolidated financial statements are accurate and complete. The critical accounting estimates and policies during the six months ended June 30, 2024 have not materially changed to those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
We believe that the significant accounting policies described in “Note 2, Summary of Significant Accounting Policies” to our audited consolidated financial statements are accurate and complete. The critical accounting estimates and policies during the nine months ended September 30, 2024 have not materially changed to those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On June 3, 2024, we permanently reduced the exercise price of our outstanding 16,184,612 public warrants and 515,000 private warrants, previously exercisable at $11.50 per share, to an exercise price of $7.80 per share. The purpose of this reduced exercise price was to potentially raise proceeds received from the exercise of such warrants, if any, for working capital and general corporate purposes.