Share Based Compensation

3 Months Ended

Mar. 31, 2025

Share Based Compensation [Abstract]

Share Based Compensation

14) Share Based Compensation

We estimate the fair value of our stock options using the Black-Scholes option pricing model. This requires the input of subjective assumptions, including the fair value of our underlying common stock, the expected term of stock options, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock, the most critical of which, prior to our IPO, was the estimated fair value of common stock. The assumptions used in our option pricing model represent our best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. The resulting fair value, net of actual forfeitures, is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award.

These assumptions used in the Black-Scholes option pricing model, other than the fair value of our common stock, are estimated as follows:

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Expected volatility. Since a public market for our common stock did not exist prior to our IPO in October 2021 and, therefore, we do not have an extensive trading history of our common stock, we estimated the expected volatility based on the volatility of similar publicly-held entities (guideline companies) over a period equivalent to the expected term of the awards. In evaluating the similarity of guideline companies to us, we considered factors such as industry, stage of life cycle, size, and financial leverage. We intend to continue to consistently apply this process using the same or similar guideline companies to estimate the expected volatility until sufficient historical information regarding the volatility of the share price of our common stock becomes available.

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Expected term. We estimate the expected term using the simplified method, as we do not have sufficient historical exercise activity to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The simplified method calculates the average period the stock options are expected to remain outstanding as the midpoint between the vesting date and the contractual expiration date of the award.

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Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for maturities corresponding with the expected term of the option.

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Expected dividend yield. We have never declared or paid any dividends and do not presently plan to pay dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero.

We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations

Historically for all periods prior to our IPO, given the absence of a public trading market for our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation, we exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock including:

	●	contemporaneous valuations performed at periodic intervals by unrelated third-party specialists

	●	our actual operating and financial performance.

	●	relevant precedent transactions involving our capital stock;

	●	likelihood of achieving a liquidity event, such as an initial public offering or a sale of our company given prevailing market conditions and the nature and history of our business;

	●	market multiples of comparable companies in our industry;

	●	stage of development.

	●	industry information such as market size and growth;

	●	illiquidity of stock-based awards involving securities in a private company; and

In valuing our common stock prior to our IPO, our board of directors determined the enterprise value of our company using both the income approach and market approach valuation methods. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate based on the cost of capital at a company’s stage of development. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple is determined and then applied to the subject company’s financial results to estimate the enterprise value of the subject company.

A summary of option activity under the employee share option plan as of March 31, 2025, and changes during the year then period is presented below.

Schedule of stock option activity

		Options								Shares of Stock
		No. of Options				Weighted Average Price				No. of Shares				Weighted Average Price				Total
Balance available under the plan as at January 1, 2025			592,252				—				—				—				592,252
Granted			—				—				—				—				—
Cancelled/expired/exercised			2,300				4				—				—				2,300
Additions to the plan			3,138,236																3,138,236
Balance available under the plan as of March 31, 2025			3,732,788				—				—				—				3,732,788

A summary of option activity under the employee share option plan as of March 31, 2024, and changes during the year then ended is presented below.

		Options								Shares of Stock
		No. of Options				Weighted Average Price				No. of Shares				Weighted Average Price				Total
Balance available under the plan on January 1, 2024			538,265				—				—				—				538,265
Granted			(20,000	)		$	1,78												(20,000	)
Cancelled/expired			17,110																17,110
Additions to the plan			-				-				-				-				-
Balance available under the plan on March 31, 2024			535,375																535,375

The following table summarizes the activities for our unvested options for the year ended March 31, 2025

		Number of				Weighted average Grant Date Fair Value
		Shares				Per Share
Unvested on January 1, 2025			35,849			$	1.88
Granted			-				-
Vested			(35,849	)			1.88
Forfeited			-				-
Unvested on March 31, 2025			-			$	-

The following table summarizes the activities for our unvested options for the year ended March 31, 2024

		Number of				Weighted average Grant Date Fair Value
		Shares				Per Share
Unvested on January 1, 2024			46,928			$	2.24
Granted			-				-
Vested			(31,496	)			0.80
Forfeited			(3,000	)			3.50
Unvested on March 31, 2024			75,424			$	1.59

The weighted-average grant date fair value of options granted during the quarter ended March 31, 2025, was $0 and $0 during the quarter ended March 31, 2024. The total fair value of the vested options as of March 31, 2025, and March 31, 2024, were $ 911 and $576 respectively.

As of March 31, 2025, there was $36 of unrecognized share-based compensation expense related to unvested options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately two years based on vesting under the award service conditions.

Schedule of assumptions

Fair value assumptions		2024				2023
Expected volatility			45%-52	%			45%-52	%
Expected terms (in years)			4				4
Risk-free interest rate			4.70%-5.70	%			4.60%-5.46	%
Dividend yield			0	%			0	%