NOTE 8 – STOCKHOLDERS’ EQUITY

Series A Preferred Stock

The Company is authorized to issue 100,000 shares of $0.001 par value Series A preferred stock (“Series A”). There were fourteen (14) shares of Series A preferred stock outstanding as of March 31, 2025 and December 31, 2024. Series A stockholders have one vote per share on an “as converted” basis for all matters submitted to a stockholder vote, without the right to cumulative voting in director elections. They are entitled to dividends, if declared by the Company’s board of directors (the “Board of Directors”) from legally available funds, distributed pro rata based on their Series A holdings on an as-converted basis. In the event of liquidation or dissolution, Series A stockholders share ratably in any remaining assets after liabilities are paid, with no liquidation preferences. Each Series A share is convertible into 82 shares of common stock at the stockholder’s discretion.

Common Stock

As of March 31, 2025 and December 31, 2024, the Company was authorized to issue 105,263,158 shares of common stock with a par value of $0.001 per share. The number of shares outstanding was 33,288,934 as of March 31, 2025 and 33,278,934 as of December 31, 2024. Common stockholders are entitled to one vote per share on all matters submitted to a stockholder vote, without the right to cumulative voting in director elections. They are eligible for dividends, if declared by the Board of Directors from legally available funds, subject to the prior rights of any outstanding preferred stock and any contractual restrictions on dividend payments. In the event of liquidation or dissolution, common stockholders share ratably in any assets remaining after payment of liabilities and satisfaction of liquidation preferences of any outstanding preferred stock. Common stock carries no preemptive or subscription rights and is not convertible into other securities.

Stock Issued for Services

During the three months ended March 31, 2025 and 2024, the Company issued 10,000 and 40,000, respectively, shares of common stock to several consultants in connection with business development and professional services. The Company valued the common stock issuances at $4 thousand and $60 thousand, respectively, based upon the closing market price of the Company’s common stock on the date of the agreement.

Stock Issued related to Acquisition

On March 1, 2024, the Company issued 15,000 shares of common stock to the former owner of Alliance Partners as consideration for extending the payment due date for the remaining balance of the Purchase consideration due.

See Note 1 - Purchase of Alliance Partners, LLC.

Equity Receivable

As of March 31, 2025, $1,350 thousand was collected as part of the equity receivable with AFIOS Partners, 1,350 thousand warrants were issued with an exercise price of $0.90 and 2,025 thousand warrants were issued with an exercise price of $1.20. in May 2025, an additional $500 thousand was received. The stock and warrants were no issued as of the date of this filing.

Stock Options

The Company grants stock options as part of employee compensation and recognizes these options’ expense over the vesting period. If an employee does not meet certain conditions such as sales targets or leaves the Company before the options vest, these options are forfeited as they occur.

On December 7, 2021, the Board of Directors authorized the Company’s Equity Incentive Plan in order to facilitate the grant of equity incentives to employees (including our named executive officers), directors, independent contractors, merchants, referral partners, channel partners and employees of the Company’s to enable the Company to attract, retain and motivate employees, directors, merchants, referral partners and channel partners, which is essential to its long-term success. As of the date of this report, the stockholders have not voted on approving additional shares for the Company’s Equity Incentive Plan. A total of 2,702,632 shares of common stock were authorized under the Company’s Equity Incentive Plan, for which as of March 31, 2025, a total of 508,167 are available for issuance.

On January 21, 2025, the Company extended the expiration term of vested and outstanding stock options to the former CFO. The fair value was calculated both on the modification date and prior to the modification. During the three months ended March 31, 2025, the Company recorded the option modification expense for $49 thousand.

During the three months ended March 31, 2025, the Company granted 1,848,332 options to purchase common stock. The grants included:

The following table summarizes option activity:

The unvested options include a total of 2.5 million options contingent upon reaching specified sales milestones.

During the three months ended March 31, 2025, the Company recorded $832 thousand in option expenses, which includes the modification expense noted above of $49 thousand.

The options vest in equal monthly installments ranging from immediately to 12 months. For the three months ended March 31, 2025, the fair value of the options were valued using a Black-Scholes option pricing model with the following assumptions:

Warrants

As of March 31, 2025, the Company has 19,281,627 warrants outstanding. The following table summarizes warrant activity: