UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” or “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer ☐ |
Accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The total number of shares of common stock, par value $0.01 per share, outstanding as of November 14, 2024 was
CONTANGO ORE, INC.
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION |
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Item 1. |
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Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 4. |
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Item 5. |
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Item 6. |
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All references in this Form 10-Q to the “Company”, “CORE”, “we”, “us” or “our” are to Contango ORE, Inc.
2
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Item 1 - Financial Statements
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September 30, 2024 |
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December 31, 2023 |
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ASSETS |
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CURRENT ASSETS: |
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Cash |
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$ |
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$ |
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Restricted cash |
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Prepaid expenses and other |
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Total current assets |
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LONG-TERM ASSETS: |
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Investment in Peak Gold, LLC |
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Property & equipment, net |
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Commitment fee |
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Marketable securities |
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Total long-term assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Derivative contract liability |
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Debt, current portion |
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Income taxes payable |
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Total current liabilities |
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NON-CURRENT LIABILITIES: |
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Advance royalty reimbursement |
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Asset retirement obligations |
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Contingent consideration liability |
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Derivative contract liability |
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Debt non-current portion, net |
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Deferred tax liability |
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Total non-current liabilities |
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TOTAL LIABILITIES |
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STOCKHOLDERS’ EQUITY/(DEFICIT): |
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Preferred Stock, |
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Common Stock, $ |
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Additional paid-in capital |
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Treasury stock at cost ( |
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Accumulated deficit |
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TOTAL STOCKHOLDERS’ EQUITY/(DEFICIT) |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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EXPENSES: |
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Claim rental expense |
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$ |
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$ |
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$ |
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$ |
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Exploration expense |
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Depreciation expense |
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Accretion expense |
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Impairment from loss, net of recovery |
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General and administrative expense |
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Total expenses |
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Income/(loss) from equity investment in Peak Gold, LLC |
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Total income/(expense) from operations |
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OTHER INCOME/(EXPENSE): |
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Interest income |
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Interest expense |
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Gain/(loss) on derivative contracts |
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Gain/(loss) on metal sales |
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Unrealized gain/(loss) on marketable securities |
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Other income |
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Total other income/(expense) |
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(Loss)/income before income taxes |
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Income tax expense |
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NET LOSS |
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$ |
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$ |
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$ |
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$ |
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LOSS PER SHARE |
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Basic and diluted |
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$ |
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$ |
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$ |
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$ |
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
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Basic and diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine Months Ended September 30, |
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2024 |
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2023 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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$ |
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$ |
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
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Stock-based compensation |
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Depreciation expense |
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Accretion expense |
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Impairment expense |
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Equity (earnings) loss from investment in Peak Gold, LLC |
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Cash distribution from Peak Gold, LLC |
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Unrealized loss from derivative contracts |
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Unrealized loss from marketable securities |
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Interest expense paid in stock |
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Change in the fair value of contingent consideration |
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Amortization of debt discount and debt issuance fees |
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Non-cash other income from reimbursement of silver royalty |
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Changes in operating assets and liabilities: |
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Decrease (increase) in prepaid expenses and other |
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Increase (decrease) in accounts payable and accrued liabilities |
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Increase in income taxes payable |
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Net cash provided by (used) in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Cash invested in Peak Gold, LLC |
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Acquisition of HighGold Mining Inc. and Avidian Gold Corp., net of cash acquired |
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Acquisition of Contango Lucky Shot Alaska, LLC |
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Acquisition of property and equipment |
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Net cash used in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Cash paid for shares withheld from employees for payroll tax withholding |
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Cash proceeds from warrant exercise |
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Cash proceeds from debt |
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Principal repayments on debt |
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Cash proceeds from common stock and warrant issuance, net |
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Debt issuance costs |
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Net cash provided (used) in financing activities |
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NET INCREASE IN CASH |
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CASH AND RESTRICTED CASH, BEGINNING OF PERIOD |
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CASH AND RESTRICTED CASH, END OF PERIOD |
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$ |
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$ |
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Supplemental disclosure of cash flow information |
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Cash paid for: |
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Interest expense |
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$ |
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$ |
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Non-cash investing and financing activities |
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Commitment fee derecognized and added to debt discount |
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Shares issued for acquisitions |
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Consideration payable for Avidian acquisition |
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Accrued transaction costs for HighGold acquisition |
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Total non-cash investing and financing activities |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
CONTANGO ORE, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY/(DEFICIT)
(Unaudited)
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Treasury |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Stock |
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Deficit |
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Equity/(Deficit) |
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Balance at June 30, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation |
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— |
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Restricted stock activity |
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Common stock issuance |
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Cost of common stock issuance |
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— |
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Common stock issuance for acquisitions |
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Stock issued for convertible note interest payment |
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Net loss for the period |
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— |
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Balance at September 30, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Treasury |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Stock |
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Deficit |
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Equity/(Deficit) |
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Balance at June 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation |
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— |
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Restricted stock activity |
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Common stock issuance |
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Cost of common stock issuance |
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— |
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Stock issued for convertible note interest payment |
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Treasury shares withheld for employee taxes |
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— |
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( |
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Net loss for the period |
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— |
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( |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Treasury |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Stock |
|
|
Deficit |
|
|
Equity/(Deficit) |
|
||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
Stock-based compensation |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restricted stock activity |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Common stock issuance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of common stock issuance |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
Common stock issuance for acquisitions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Issuance of warrants |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stock issued for convertible note interest payment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss for the period |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Balance at September 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
|
|
Total |
|
||||||
|
|
Common Stock |
|
|
Paid-In |
|
|
Treasury |
|
|
Accumulated |
|
|
Stockholders’ |
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Stock |
|
|
Deficit |
|
|
Equity/(Deficit) |
|
||||||
Balance at December 31, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||||
Stock-based compensation |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Restricted stock activity |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Common stock issuance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of common stock issuance |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
Treasury shares issued in common stock issuance |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Warrant modification |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
Fair value of warrants issued with common stock |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Treasury shares issued for convertible note interest payment |
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
Stock issued for convertible note interest payment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Treasury shares withheld for employee taxes |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net loss for the period |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Balance at September 30, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||