CAPITAL STOCK AND REVERSE STOCK SPLIT | NOTE 12: CAPITAL STOCK AND REVERSE STOCK SPLIT Changes in Authorized Shares On February 19, 2021 the written consent of the holders of a majority of the voting power of the outstanding capital stock of the Company as of the Record Date (the “Consenting Stockholders”) approved the following corporate actions: (1) Amendment of our articles of incorporation (the “Articles of Incorporation”) to provide for a decrease in the authorized shares of the Company’s Common Stock from 1,800,000,000 10,000,000 1,000,000,000 (2) That the Board be authorized to implement through the amendment to our Articles of Incorporation a reverse stock split of the Company’s Common Stock by a ratio of not less than 1-for-10 and not more than 1-for-2,000 DATA443 RISK MITIGATION, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2021 On April 21, 2021, the Company increased the number of authorized shares of common stock from 1.8 3.8 On June 10, 2021, the Company filed a Certificate of Amendment to the Articles of Incorporation (the “ Certificate of Amendment 1,000,000,000 Reverse Stock Split common stock in a ratio of 1-for-2,000. The preferred stock of the Company was not changed. The 1-for-2,000 Reverse Stock split was processed by FINRA and became effective at the start of trading on July 1, 2021. As a result of the Reverse Stock Split, every 2,000 shares of the Company’s issued and outstanding common stock, par value $0.001 per share, were converted into one (1) share of common stock, par value $0.001 per share. No fractional shares will be issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of pre-Reverse Stock Split shares of the Company’s common stock not evenly divisible by 2,000 will have the number of post-Reverse Stock Split shares of the Company’s common stock to which they are entitled rounded up to the nearest whole number of shares of the Company’s common stock. All per share amounts and number of shares in the consolidated financial statements and related notes have been retroactively adjusted to reflect the reverse stock split Preferred Stock Series A Preferred Stock As of June 30, 2021 and December 31, 2020, 150,000 1,000 entitled to vote 15,000 shares of common stock on all matters submitted to a vote by shareholders voting common stock Series B Preferred Stock As of June 30, 2021 and December 31, 2020, 26,650 5,300 10.00 9 During the six months ended June 30, 2021, the Company issued a total of 33,210 ● 26,650 266,500 16,500 ● 6,560 65,600 During the six months ended June 30, 2021, shares of series B preferred stock was converted into 14,533 DATA443 RISK MITIGATION, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2021 Common Stock As of June 30, 2021, the Company is authorized to issue 1,000,000,000 shares of common stock with a par value of $ 0.001 . All shares have equal voting rights, are non-assessable, and have one vote per share . The total number of shares of Company common stock issued and outstanding as of June 30, 2021 and December 31, 2020, respectively, was 743,246 and 522,006 shares, respectively. During the six months ended June 30, 2021, the Company issued common stock as follows: ● 101,748 ● 83,336 1,000,000 10,000 143,199 ● ● 9,168 8,923 ● 14,533 ● 2,863 ● 669 Warrants During the six months ended June 30, the Company issued warrants (i) to acquire 55,467 15.00 55,467 15.00 832,000 A summary of activity during the period ended June 30, 2021 follows: SUMMARY OF WARRANTS ACTIVITY Warrants Outstanding Weighted Average Shares Exercise Price Outstanding, December 31, 2020 50,000 $ 20.00 Granted 55,467 15.00 Reset feature 9,030 5.80 Exercised (9,030 ) 5.80 Forfeited/canceled - - Outstanding, June 30, 2021 105,467 $ 17.37 The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2021: SCHEDULE OF OUTSTANDING AND EXERCISABLE WARRANTS Warrants Outstanding Warrants Exercisable Number of Weighted Average Remaining Weighted Average Number of Weighted Average Shares Contractual life Exercise Price Shares Exercise Price 50,000 4.45 $ 20.00 50,000 $ 20.00 55,467 4.81 $ 15.00 55,467 $ 15.00 DATA443 RISK MITIGATION, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2021 |