Phoenix Rising Companies (ticker: PRCX) has presented noteworthy insights in its latest U.S. Securities and Exchange (SEC) report, particularly regarding its convertible notes for the year ended December 31, 2021. The company experienced an interesting financial year, with a significant increase in its interest expense on convertible notes and the conversion of notes with principal amounts and accrued interest.
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Interest Expense on Convertible Notes
According to the SEC report, the interest expense on convertible notes for Phoenix Rising Companies reached $112,128 in 2021, compared to $113,870 during the previous year. This considerable expense demonstrates a crucial financial aspect for the company as it continues its growth and expansion efforts.
In addition, the report reveals that during 2021, the company converted notes with principal amounts and accrued interest worth $595,610 into 35,317,393 common shares. The corresponding derivative liability at the date of conversion amounted to $1,377,579 and was credited to additional paid-in capital. This conversion of notes can be an impactful decision for the company, as it offers an alternative option to manage its financial liabilities.
Convertible Notes Issued
Phoenix Rising Companies also provided information on its convertible notes issued during the fiscal years of 2020 and 2021. For 2021, the company issued a total principal amount of $743,500 in convertible notes, with cash proceeds amounting to $688,500. The terms of these convertible notes included an annual interest rate of 8% and a conversion period ranging from 12 months to 18 months.
Comparatively, during the year ended December 31, 2020, the company issued a total principal amount of $1,034,750 in convertible notes, with cash proceeds amounting to $912,000. The terms of these convertible notes included a range of annual interest rates between 8% and 13%, with a conversion period varying from 9 months to 18 months.
Warrants, Derivative Liabilities, and Stockholders’ Equity
The report also examined the company’s experience with warrants, derivative liabilities, and stockholders’ equity. As of December 31, 2021, Phoenix Rising Companies had outstanding warrants of 245,366,811 shares, with a weighted average exercise price of $0.0065. The intrinsic value of these warrants reached $436,049 as of the same date.
As for the company’s derivative liabilities, the balance as of December 31, 2021, amounted to $2,768,484. Using the Black-Scholes valuation model, the company calculated the fair value of its derivative liabilities for all warrants and the notes that became convertible during 2021, amounting to $1,124,804.
In terms of stockholders’ equity, Phoenix Rising Companies had 1,500,000 preferred shares and 169,127,299 common shares issued and outstanding as of December 31, 2021. During the same year, the company issued 48,207,931 shares of common stock for various purposes, including note conversions and cashless exercise of warrants.
Overall, the financial results and activities detailed in Phoenix Rising Companies’ SEC report offer a comprehensive understanding of the company’s current performance and potential future growth. The combination of interest expense on convertible notes, note conversions, and stock market activities provides a solid foundation for the business as it continues to evolve and expand.
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