Soluna Holdings, Inc S-1/A, filed Jul 23, 2021

Soluna Holdings, Inc (SLNH)

S-1/A 2021-07-23

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Nevada		3829		14-1462255
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒

	Emerging growth company ☐

Title of Securities Being Registered	Proposed Maximum Aggregate Offering Price⁽¹⁾⁽²⁾		Amount of Registration Fee⁽¹⁾⁽³⁾
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share	$	17,940,000	$	1,957.25
Total	$	17,940,000	$	1,957.25

	Per Share	Total
Public offering price	$	$
Underwriting discounts⁽¹⁾	$	$
Proceeds to us before expenses ⁽²⁾	$	$

ABOUT THIS PROSPECTUS	ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	iii
PROSPECTUS SUMMARY	1
THE OFFERING	7
SUMMARY CONSOLIDATED FINANCIAL INFORMATION	12
RISK FACTORS	13
USE OF PROCEEDS	35
CAPITALIZATION	36
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	37
BUSINESS	51
DESCRIPTION OF OUR SECURITIES	63
DESCRIPTION OF THE SERIES A PREFERRED STOCK	66
PROPERTIES	80
LEGAL PROCEEDINGS	81
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	82
EXECUTIVE COMPENSATION	89
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	94
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	97
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	99
UNDERWRITING	106
LEGAL MATTERS	110
EXPERTS	110
WHERE YOU CAN FIND MORE INFORMATION	110
INCORPORATION OF DOCUMENTS BY REFERENCE	110
MECHANICAL TECHNOLOGY, INCORPORATED AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS	F-1

	●	The market price of the Series A Preferred Stock may be volatile and may fluctuate in a way that is disproportionate to our operating performance.

	●	The amount of cash we will have available for dividends on the Series A Preferred Stock will not depend solely on our profitability and the ability of our subsidiaries to pay dividends or advance or repay funds to us, therefore we may not have sufficient cash from our operations to enable us to pay dividends on the Series A Preferred Stock following the payment of expenses.

	●	We may incur additional indebtedness, which may impact our financial position, cash flow and ability to pay dividends on the Series A Preferred Stock, and we may incur additional indebtedness and obligations to pay dividends on preferred stock, some of which may be senior to the rights of the Series A Preferred Stock.

	●	The Series A Preferred Stock represent perpetual equity interests, and the amount of your liquidation preference is fixed and you will have no right to receive any greater payment.

	●	If the Series A Preferred Stock is delisted, the ability to transfer or sell shares of the Series A Preferred Stock may be limited and the market value of the Series A Preferred Stock will likely be materially adversely affected.

	●	Market interest rates may adversely affect the value of the Series A Preferred Stock.

	●	There may be future sales of Series A Preferred Stock or similar securities, which may adversely affect the market price of the Series A Preferred Stock.

	●	We are permitted to make certain payments even after dividend periods for which we do not declare and pay, or set aside funds for, full cumulative dividends on all outstanding shares of the Series A Preferred Stock.

	●	Prior to this Offering, there has been no public market for the Series A Preferred Stock, and we cannot assure you that the market price of the Series A Preferred Stock will not decline following this Offering.

	●	The Series A Preferred Stock may not have an active trading market.

	●	The voting rights of holders of the Series A Preferred Stock will be limited.

Issuer		Mechanical Technology, Incorporated

Series A Preferred Stock offered by us		600,000 shares at an assumed public offering price of $25.00 per share of Series A Preferred Stock, which is the midpoint of the price range set forth on the cover page of this prospectus (not including any shares issuable upon exercise by the underwriters of their over-allotment option).

Number of shares of Series A Preferred Stock prior to this Offering		None.

Dividends		Subject to the preferential rights, if any, of the holders of any class or series of capital stock of the Company ranking senior to the Series A Preferred Stock as to dividends, the holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by the Board (or a duly authorized committee of the Board), only out of funds legally available for the payment of dividends, cumulative cash dividends at the annual rate of 9.0% of the $25.00 liquidation preference per year (equivalent to $2.25 per year). Dividends on the Series A Preferred Stock will accumulate and be cumulative from, and including, the date of original issue by us of the Series A Preferred Stock. Dividends, when, as and if declared by the Board (or a duly authorized committee of the Board) will be payable monthly in arrears on the final day of each month, beginning on , 2021, each of which we refer to as a “dividend payment date”; provided that if any dividend payment date is not a business day, as defined in the certificate of designations with respect to the Series A Preferred Stock, then such date will nevertheless be a dividend payment date but the dividend which would otherwise have been payable on that dividend payment date, when, as and if declared, will be paid on the next succeeding business day and no interest, additional dividends or other sums will accumulate on the amounts so payable for the period from and after that dividend payment date to the next succeeding business day. The first dividend on the Series A Preferred Stock, when, as and if declared, will be paid on , 2021, which will be for less than a full month after the initial issuance of the Series A Preferred Stock and will cover the period from the first date we issue and sell the Series A Preferred Stock through, but not including, , 2021. See “Description of the Series A Preferred Stock—Dividends”

Restrictions on Dividends, Redemption and Repurchases		So long as any share of the Series A Preferred Stock remains outstanding, unless we also have either paid or declared and set apart for payment full cumulative dividends on the Series A Preferred Stock for all past completed dividend periods, we will not during any dividend period: ● pay or declare and set apart for payment any dividends or declare or make any distribution of cash or other property on common stock or other capital stock that ranks junior to or on parity with the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon our voluntary or involuntary liquidation, dissolution or winding up (other than, in each case, (a) a dividend paid in common stock or other stock ranking junior to the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon our voluntary or involuntary liquidation, dissolution or winding up or (b) any declaration of a common stock dividend in connection with any stockholders’ rights plan, or the issuance of rights, stock or other property under any stockholders’ rights plan, or the redemption or repurchase of rights pursuant to the plan);

		On or after , 2026, the Series A Preferred Stock may be redeemed at our option, in whole or in part, from time to time, at a redemption price of $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the date of such redemption, upon the giving of notice. See “Description of the Series A Preferred Stock – Redemption – Optional Redemption.”

Special Optional Redemption		During any Delisting Event (defined below), whether before or after , 2026, we may, at our option, redeem the Series A Preferred Stock, in whole or in part and within 90 days after the date of the Delisting Event, by paying $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the date of such redemption. In addition, during any period of time (whether before or after , 2026), upon the occurrence of a Change of Control (defined below), we may, at our option, redeem the Series A Preferred Stock, in whole or in part and within 120 days after the first date on which such Change of Control occurred, by paying $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the date of such redemption. If, prior to the Delisting Event Conversion Date or Change of Control Conversion Date (each defined below), as applicable, we have provided or provide notice of redemption with respect to the Series A Preferred Stock (whether pursuant to our optional redemption right described above under “Description of the Series A Preferred Stock—Optional Redemption” or our special optional redemption described here), the holders of Series A Preferred Stock will not be permitted to exercise the conversion right described below under “— Conversion Right Upon a Change of Control” in respect of their shares called for redemption. See “Description of the Series A Preferred Stock—Special Optional Redemption.”

Ranking		The Series A Preferred Stock will, with respect to dividend rights and rights as to the distribution of assets upon our liquidation, dissolution or winding-up, rank: ● senior to all classes or series of our common stock and to all other capital stock issued by us expressly designated as ranking junior to the Series A Preferred Stock; ● on parity with any future class or series of our capital stock expressly designated as ranking on parity with the Series A Preferred Stock, none of which exist on the date hereof (“Parity Stock”); ● junior to any future class or series of our capital stock expressly designated as ranking senior to the Series A Preferred Stock, none of which exist on the date hereof (“Senior Stock”); and ● junior to all of our existing and future indebtedness (including subordinated indebtedness and any indebtedness convertible into common stock or preferred stock) and other liabilities with respect to assets available to satisfy claims against us and structurally subordinated to the indebtedness and other liabilities of (as well as any preferred equity interests held by others in) our existing or future subsidiaries.

		We may issue junior capital stock described in the first bullet above and parity capital stock described in the second bullet above at any time and from time to time in one or more series without the consent of the holders of the Series A Preferred Stock. Our ability to issue any Senior Stock described in the third bullet above is limited as described under “Description of the Series A Preferred Stock—Limited Voting Rights.”

Liquidation Rights		In the event of the voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of shares of Series A Preferred Stock will be entitled to be paid out of our assets legally available for distribution to our stockholders (i.e., after satisfaction of all our liabilities to creditors, if any) and, subject to the rights of holders of any shares of each other class or series of capital stock ranking, as to rights to the distribution of assets upon our voluntary or involuntary liquidation, dissolution or winding-up, senior to the Series A Preferred Stock, a liquidation preference of $25.00 per share, plus an amount equal to any accumulated and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment may be made to holders of shares of common stock or any other class or series of our capital stock ranking, as to rights to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up, junior to the Series A Preferred Stock. See “Description of the Series A Preferred Stock—Liquidation Preference”.

Limited Voting Rights		Holders of Series A Preferred Stock generally will have no voting rights, except with respect to certain amendments to the terms of the Series A Preferred Stock and as otherwise applicable by law. See “Description of the Series A Preferred Stock—Limited Voting Rights” beginning on page 76 of this prospectus.

No Maturity Date		The Series A Preferred Stock is perpetual and has no maturity date, and we are not required to redeem the Series A Preferred Stock. Accordingly, all shares of Series A Preferred Stock will remain outstanding indefinitely, unless and until we decide to redeem them or they are converted in connection with a Delisting Event or Change of Control.

Preemptive and Conversion Rights		Holders of Series A Preferred Stock will have no preemptive rights, nor any conversion rights, except as described under “Description of the Series A Preferred Stock—Conversion”.

Conversion Right Upon a Change of Control or Delisting Event		Upon the occurrence of a Delisting Event or a Change of Control, as applicable, each holder of Series A Preferred Stock will have the right (unless, prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, we have provided or provide notice of our election to redeem the Series A Preferred Stock as described above under “— Special Optional Redemption” or “—Optional Redemption”) to convert some or all of the shares of Series A Preferred Stock held by such holder on the Delisting Event Conversion Date or Change of Control Conversion Date (each defined below), as applicable, into a number of shares of our common stock (or equivalent value of alternative consideration) per share of Series A Preferred Stock equal to Common Stock Conversion Consideration (defined below). See “Description of the Series A Preferred Stock—Limited Conversion Rights”.

Over-allotment Option		We have granted a 45-day option to the underwriters to purchase up to 90,000 additional shares of Series A Preferred Stock (representing 15% of the number of the shares of Series A Preferred Stock sold in this Offering), based on an assumed public offering price of $25.00 per share of Series A Preferred Stock, on the same terms as the Series A Preferred Stock sold in this Offering, less underwriting discounts payable by us, solely to cover over-allotments, if any. If the underwriters exercise the option in full, the total underwriting discounts payable by us will be $135,000 and the total proceeds to us, before expenses, will be approximately $2.1 million.

Listing		We have applied to list the Series A Preferred Stock on Nasdaq under the symbol “MKTYP” and, if the application is approved, we will list the Series A Preferred Stock on Nasdaq prior to the closing of this Offering. If our listing application is not approved by Nasdaq, we will not be able to consummate this Offering and will terminate this Offering.

Use of Proceeds		We estimate that we will receive net proceeds, after deducting estimated underwriting discounts and estimated expenses payable by us, of approximately $13.7 million from this Offering, based upon an assumed public offering price of $25.00 per share of Series A Preferred Stock, which is the midpoint of the price range set forth on the cover page of this prospectus, and assuming no exercise of the underwriters’ over-allotment option, and approximately $16.3 million, assuming full exercise of the over-allotment option. We intend to use the net proceeds of this Offering for the acquisition, development and growth of data centers, including cryptocurrency mining processors, other computer processing equipment, data storage, electrical infrastructure, software and real property (i.e. land and buildings) and business, product line or asset acquisitions related to MTI Instruments and for working capital and general corporate purposes, which include, but are not limited to, operating expenses. See “Use of Proceeds” on page 35 for more information.

Transfer Agent and Registrar		American Stock Transfer & Trust Company, LLC

Risk Factors		Investing in our securities involves a high degree of risk. As an investor you should be prepared to lose your entire investment See “Risk Factors” beginning on page 12.

	(Dollars in thousands) For the Three Months Ended March 31,				(Dollars in thousands) For the Years Ended December 31,
	2021		2020		2020		2019
Consolidated Balance Sheets Data:
Cash	$	2,272	$	1,418	$	2,630	$	2,510
Total current assets		5,380		4,143		4,779		4,235
Total assets		9,381		5,604		8,647		5,751
Total current liabilities		2,975		1,165		1,637		1,142
Total liabilities		3,986		1,897		2,731		1,918
Total stockholders’ equity		5,395		3,708		5,916		3,833

	(Dollars in thousands) For the Three Months Ended						(Dollars in thousands) For the Years Ended
	March 31,						December 31,
	2021			2020			2020		2019
Statement of Operations:
Revenue	$	2,332		$	1,583		$	9,599	$	6,571
Net Income (Loss)		(666	)		(137	)		1,946		323

	●	Trading prices of similar securities;
	●	Our history of timely dividend payments;
	●	The annual yield from dividends on the Series A Preferred Stock as compared to yields on other financial instruments;
	●	General economic and financial market conditions;
	●	The financial condition, performance and prospectus of us and our competitors;
	●	Market volatility and business operation changes brought on by pandemics, such as the COVID-19 pandemic outbreak;
	●	Our issuance of additional preferred equity or debt securities; and
	●	Actual or anticipated variations in quarterly operating results of us and our competitors.

	March 31, 2021 (unaudited)
	Actual			As Adjusted
Cash	$	2,722,108		$	17,722,108
Stockholders’ Equity:
Common stock, par value $0.001 per share, 75,000,000 shares authorized; 10,884,850 shares issued as of March 31, 2021 actual and as adjusted	$	10,885		$	10,885
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, $25.00 liquidation preference; no shares authorized, issued or outstanding as of March 31, 2021; shares authorized; 600,000 shares issued and outstanding as of March 31, 2021, as adjusted		—			600
Additional paid-in capital		137,607,106			152,606,506
Accumulated deficit		(118,458,841	)		(118,458,841	)
Common stock in treasury, at cost, 1,015,493 shares as of March 31, 2020 actual and as adjusted	$	(13,764,362	)	$	(13,764,362	)
Total Stockholders’ Equity	$	5,394,788		$	20,394,788

	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020			$ Change			% Change
Product revenue	$	1,337		$	1,583		$	(246	)		(15.5	)%
Cryptocurrency revenue	$	995		$	—		$	995			100.0	%
Operating costs and expenses:
Cost of product revenue	$	452		$	527		$	(75	)		(14.2	)%
Cost of cryptocurrency revenue	$	328		$	—		$	328			100.0	%
Research and product development expenses	$	386		$	403		$	(17	)		(4.2	)%
Selling, general and administrative expenses	$	1,837		$	795		$	1,042			131.1	%
Operating loss	$	(671	)	$	(142	)	$	(529	)		372.5	%
Other income, net	$	5		$	2		$	3			150.0	%
Loss before income taxes	$	(666	)	$	(140	)	$	(526	)
Income tax benefit	$	—		$	3		$	(3	)
Net loss	$	(666	)	$	(137	)	$	(529	)

(Dollars in thousands)	Year Ended December 31, 2020		Year Ended December 31, 2019		$ Change		% Change
Product revenue	$	9,004	$	6,571	$	2,433		37.0	%
Cryptocurrency revenue	$	595	$	—	$	595		100.0	%
Operating costs and expenses:
Cost of product revenue	$	2,669	$	2,205	$	464		21.0	%
Cost of cryptocurrency revenue	$	405	$	—	$	405		100.0	%
Research and product development expenses	$	1,491	$	1,381	$	110		8.0	%
Selling, general and administrative expenses	$	3,584	$	2,726	$	858		31.5	%
Operating income	$	1,450	$	259	$	1,191		459.8	%
Other income, net	$	104	$	36	$	68		188.9	%
Income before income taxes	$	1,554	$	295	$	1,259		426.8	%
Income tax benefit	$	392	$	28	$	364		1,300	%
Net income	$	1,946	$	323	$	1,623		502.5	%

(1)	Contract values represent maximum potential values at time of contract placement and may not be representative of actual results.
(2)	Date represents expiration of contract, including the exercise of option extensions.

(Dollars in thousands)	Three Months Ended or As of			Three Months Ended or As of
	March 31,			March 31,
	2021			2020
Cash	$	2,722		$	1,418
Working capital		2,405			2,978
Net (loss) income		(666	)		(137	)
Net cash provided by (used in) operating activities		331			(333	)
Purchase of property, plant and equipment		(301	)		(9	)

(Dollars in thousands)	Years Ended December 31,
	2020			2019
Cash	$	2,630		$	2,510
Working capital		3,142			3,093
Net income		1,946			323
Net cash provided by operating activities		1,622			289
Purchase of property, plant and equipment		(835	)		(83	)
Cash dividends on common stock		—			(3,541	)

	2021		2020		Change
Inventory turnover		2.3		2.2		0.1
Average accounts receivable days outstanding		40		41		(1	)

Product		Description
PBS-4100+ Portable Balancing System		Provides easy-to-follow solutions for engine vibration and trim balancing
PBS-4100R+ Test Cell Vibration Analysis and Trim Balance System		Advanced trim balancing and diagnostics for engine test cells
TSC-4800A Tachometer Signal Conditioner		Signal conditioner detects and conditions signals for monitoring, measuring, and indicating engine speeds

Product Line		Description
Accumeasure™ Series		High precision capacitive boards and systems offering great stability
Microtrak™ Series		Single spot laser sensor line equipped with the latest complementary metal oxide semiconductor sensor technology with high sensitivity
Fotonic Sensor® Series		Fiber-optic-based vibration sensor systems with high frequency response

Product		Description
Proforma 300iSA		Semi-automated, non-contact full wafer surface scanning system for thickness, total thickness variation, bow, warp, site and global flatness
Proforma 300i		Manual, non-contact measurement of wafer thickness, total thickness variation, and bow
PV 1000		In process tool for measuring thickness and bow of solar wafers

Name	Age	Entity	Title	Year Appointed	Term Ends:
Michael Toporek	56	MTI	Director, Chief Executive Officer	2016⁽³⁾	2023⁽⁴⁾
		MTI Instruments	Director	2016	2021
		EcoChain	Director, President	2020	2021
Jessica L. Thomas	47	MTI	Chief Financial Officer, Secretary & Treasurer	2020	⁽⁵⁾
		MTI Instruments	Chief Financial Officer, Secretary & Treasurer	2020	⁽⁵⁾
		EcoChain	Chief Financial Officer, Secretary & Treasurer	2020	⁽⁵⁾
Moshe Binyamin	51	MTI Instruments	President	2020	⁽⁵⁾
William Hazelip	42	MTI	Director	2021	2023
		MTI Instruments	Director	2021	2023
		EcoChain	Director	2021	2023
Edward R. Hirshfield	49	MTI	Director	2016	2024
		MTI Instruments	Director	2016	2021
		EcoChain	Director	2020	2021
Matthew E. Lipman	42	MTI	Director	2016	2022
		MTI Instruments	Director	2016	2021
		EcoChain	Director	2020	2021
Alykhan Madhavji	30	MTI	Director	2021	2022
		MTI Instruments	Director	2021	2022
		EcoChain	Director	2021	2022
Thomas J. Marusak	70	MTI	Director	2004	2023
		MTI Instruments	Director	2011	2021
		EcoChain	Director	2020	2021
David C. Michaels	65	MTI	Chairman, Director	2013⁽¹⁾	2022⁽²⁾
		MTI Instruments	Chairman, Director	2013⁽¹⁾	2021
		EcoChain	Chairman, Director	2020	2021
William P. Phelan	65	MTI	Director	2004	2024
		MTI Instruments	Director	2011	2021
		EcoChain	Director	2020	2021

Name and Principal Position	Year		Salary		Option Awards (2)		Non-Equity Incentive Plan Compensation ($) (3)		All Other Compensation (4)		Total
Frederick W. Jones (1)		2020	$	145,141		—		—	$	34,992	$	180,133
Chief Executive, Chief Financial Officer and Secretary		2019	$	192,995		—	$	25,000	$	7,720	$	225,715
Michael Toporek (5) Chief Executive Officer		2020	$	20,192		—		—		—	$	20,192
Jessica L. Thomas (6) Chief Financial Officer		2020	$	73,326		—		—		—	$	73,326

(1)	Mr. Jones resigned from the Company effective September 11, 2020.

(2)	The amounts shown in this column represent the grant date fair values of any stock option awards awarded in each of the past two years. The assumptions we used in calculating the amounts for the years ended December 31, 2020 and 2019 are discussed in Note 11 to our consolidated financial statements for the years ended December 31, 2020 and 2019 in the Forms 10-K for the years ended December 31, 2020 and 2019, respectively.

(3)	The amounts shown in this column represent accruals made pursuant to the successful completion of certain performance objectives pursuant to Mr. Jones’s employment agreement.

(4)	The amounts shown in this column represent accruals made pursuant to the successful completion of certain performance objectives pursuant to Mr. Jones’s employment agreement.

(5)	Mr. Toporek became Chief Executive Officer of the Company effective October 28, 2020, and, therefore, he did not receive compensation from the Company in 2019.

(6)	Mrs. Thomas became Chief Financial Officer of the Company effective July 1, 2020, and, therefore, she did not receive compensation from the Company in 2019.

	Option Awards					Stock Awards
Name	Option Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Option Expiration Date	Number of shares or units of stock that have not vested (#)		Market value of shares or units of stock that have not vested (#)
Michael Toporek	12/12/2018	3,750 (1)	3,750	0.90	12/12/2028	—		—
Jessica L. Thomas	07/01/2020	—	25,000	0.70	07/01/2030	7,500	$	27,225

Name	Fees Earned or Paid in Cash	Total	Restricted Stock Award (shares)
Edward R. Hirshfield (1)	$10,000	$10,000	—
Matthew E. Lipman (2)	$10,000	$10,000	—
Thomas J. Marusak (3)	$10,000	$10,000	15,465
David C. Michaels (4)	$15,000	$15,000	15,465
William P. Phelan (5)	$10,000	$10,000	35,000

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights⁽¹⁾ (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))⁽²⁾ (c)
Equity compensation plans approved by security holders		398,750	$	0.87		11,125
Total		398,750				11,125

(1)	The securities available under the Plans for issuance and issuable pursuant to exercises of outstanding options may be adjusted in the event of a change in outstanding stock by reason of stock dividend, stock splits, reverse stock splits, etc.
(2)	No awards can currently be made out of the 2006 Plan.

	Number of Shares Beneficially Owned (1)
Name and Address of Beneficial Owner ⁽²⁾	Common Stock		Series A Preferred Stock		Percent of Common Stock
Executive Officers
Jessica L. Thomas (3)		13,750		—		*
Moshe Binyamin (4)		26,671		—		*
Michael Toporek (5)(11)		3,761,250		—		29.6	%

Non-Employee Directors
Edward R. Hirshfield (6)		37,850		—		*
Matthew E. Lipman (7)(11)		3,787,950		—		29.8	%
Thomas J. Marusak (8)		244,875		—		1.9	%
David C. Michaels (9)		167,577		—		1.3	%
William P. Phelan (10)		271,350		—		2.1	%
William Hazelip (11)		26,600		—		—
Alykhan Madhavji (12)		26,600		—		—

All current directors and executive officers as a group (10 persons) (10)		4,614,473		—		35.5	%

Persons or Groups Holding More than 5% of the Common Stock
Brookstone Partners Acquisition XXIV, LLC (13) 232 Madison Avenue, Suite 600 New York, NY 10016		3,750,000		—		29.5	%
Waichun Logistics Technology Limited (14) RM 903-4 9/F Wing On Plaza No. 62 Mody Road, Tsim Sha Tsui Hong Kong, Hong Kong		1,088,625		—		8.6	%

(2)	Unless otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of common stock beneficially owned by the shareholder.

(3)	Includes 7,500 shares of restricted common stock held by Ms. Thomas that are subject to forfeiture and 6,250 shares of common stock issuable to Ms. Thomas upon exercise of stock options exercisable within 60 days of July 16, 2021.

(9)	Includes 17,733 shares of restricted common stock held by Mr. Michaels that are subject to forfeiture and 62,100 shares of common stock issuable to Mr. Michaels upon exercise of stock options exercisable within 60 days of July 16, 2021.

(10)	Includes 25,000 shares of restricted common stock held by Mr. Phelan that are subject to forfeiture and 26,600 shares of common stock issuable to Mr. Phelan upon exercise of stock options exercisable within 60 days of July 16, 2021.

(11)	Includes 26,600 shares of common stock issuable to Mr. Hazelip upon exercise of stock options exercisable within 60 days of July 16, 2021.

(12)	Includes 26,600 shares of common stock issuable to Mr. Madhavji upon exercise of stock options exercisable within 60 days of July 16, 2021.

(13)	Representatives of Brookstone XXIV have provided us the following information: As the Manager of Brookstone XXIV, Brookstone Partners I.A.C. may be deemed to beneficially own the shares of common stock owned directly by Brookstone XXIV. Michael Toporek is President of Brookstone Partners I.A.C. and Matthew Lipman is Secretary of Brookstone Partners I.A.C. and share voting and dispositive power over the shares of common stock owned by Brookstone XXIV. As a result of the foregoing, in computing the beneficial ownership of all executive officers and directors, as a group, the 3,750,000 shares of common stock owned indirectly by each of Mr. Toporek and Mr. Lipman, as a result of their interests in Brookstone XXIV and/or its affiliates, is only counted once. The address of each of Brookstone XXIV, Brookstone Partners I.A.C., Michael Toporek, and Matthew Lipman is 232 Madison Avenue, Suite 600, New York, New York 10016.

(14)	Includes 1,088,625 shares of common stock held by Waichun Logistics Technology Limited, a Hong Kong limited liability company (“Waichun Logistics”). Waichun Logistics has the power to dispose of and the power to vote the shares of common stock beneficially owned by it, which power may be exercised by its Chief Executive Officer, Mr. Hui Xian, a Chinese national. Mr. Xian, as Chief Executive Officer of Waichun Logistics, has the power to vote and/or dispose of the shares of common stock beneficially owned by Waichun Logistics. Mr. Xian does not directly own any shares of common stock or preferred stock of the Company. By reason of the provisions of Rule 13d-3 of the Act, Mr. Xian may be deemed to beneficially own the shares of common stock beneficially owned by Waichun Logistics. The principal business address of Waichun Logistics is RM 903-4 9/F Wing On Plaza No. 62 Mody Road, Tsim Sha Tsui, Hong Kong, Hong Kong. The address of Mr. Xian is 5A502 Zhenshan Dao, Lanjiangshandi Huayuan 2 qi, Futian District, Shenzhen, China.