v3.26.1
STOCKHOLDERS’ EQUITY
 12 Months Ended
Dec. 31, 2025
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 11 STOCKHOLDERS’ EQUITY

 

(A) Common Stock

 

The Company issued the following common stock during 2025 and 2024:

 

        Average Value 
Transaction Type  Shares Issued   Valuation $   Per Share 
2025 Equity Transactions               
Common stock issued, pursuant to services provided   6,368,231   $13,560,580   $2.13 
Common stock issued pursuant to stock at the market offering, net   4,243,123    5,424,368    1.28 
Common stock issued pursuant to preferred dividends   30,842    38,559    1.25 
Common stock issued pursuant to conversion of notes   272,728    600,000    2.20 
Common stock issued pursuant to conversion of accrued interest   433,073    615,291    1.42 
Common stock issued pursuant to exercise of options   1,001,492    420,000    0.42 
Common stock issued pursuant to conversion of preferred stock   1,958,336    2,550,000    1.30 
                
2024 Equity Transactions               
Common stock issued, pursuant to services provided   4,369,031   $13,474,433     0.82-1.78  
Common stock issued pursuant to stock at the market offering, net   3,535,067    4,330,295    0.9 – 1.64 
Common stock issued pursuant to exercise of options, net   128,023    7,501    - 
Common stock issued pursuant to acquisition   1,853,421    -    - 

 

(B) Preferred Stock

 

During October 2024, the Company completed its authorization of the issuance of 440,000 shares of newly authorized Series A Preferred Stock and Series A-1 Preferred Stock. The designations of each class of preferred stock are as follows:

Transaction Type  Quantity   Carrying Value   Value per Share, gross 
Preferred Stock Balance at January 1, 2024   -   $-   $- 
Preferred Stock Series A   200,000    5,000,000    25 
Preferred Stock Series A-1   240,000    6,000,000    25 
Preferred Stock Balance at December 31, 2024   440,000   $11,000,000   $25 

 

During the year ended December 31, 2025, the Company authorized the issuance of 60,000 shares of a new series of preferred stock Series A-2. Details of activity in Preferred Stock Series A-1 and Series A-2 are as follows:

 

Transaction Type  Quantity   Carrying Value   Value per Share, gross 
Preferred Stock Series A-1 Balance at January 1, 2025   240,000   $6,000,000   $25 
Issuance   154,000    3,674,167    25 
Conversion to common stock   (102,000)   (2,550,000)   25 
Preferred Stock Series A-1 Balance at December 31, 2025   292,000   $7,124,167   $25 
                
Preferred Stock Series A-2 Balance at January 1, 2025   -   $-   $- 
Issuance   60,000    1,500,000    25 
Conversion to common stock   -    -    - 
Preferred Stock Series A-2 Balance at December 31, 2025   60,000   $1,500,000   $25 

 

The designations of each class of preferred stock are as follows:

 

Series A Preferred Stock (temporary equity):

 

  ● Cumulative dividend of 8% annually, 12% if paid after dividend date;
  ● Original issue price of $25 per share;
  ● Conversion option at the holder’s option at $1.20 per share;
  ● Redemption at the price of $25 per share at the Company’s option after 5 years or upon change of control (substantially within the control of the holder);
  ● Voting rights on as converted basis.

 

 

Series A-1 and A-2 Preferred Stock (permanent equity):

 

  ● Cumulative dividend of 8% annually, 12% if paid after dividend date;
  ● Original issue price of $25 per share;
  ● Conversion option at the holder’s option at $1.20 per share for Series A and A-1 and $2 per share for Series A-2;
  ● Redemption at the price of $25 per share at the Company’s option after 3 years or upon change of control (substantially outside the control of the holder);
  ● Voting rights on as converted basis.

 

(C) Stock Options

 

The following is a summary of the Company’s stock option activity during 2025 and 2024:

 

           Weighted     
           Average     
           Remaining     
       Weighted   Contractual   Aggregate 
       Average   Life   Intrinsic 
Options  Shares   Exercise Price   (In Years)   Value 
Outstanding, January 1, 2025   32,493,392   $7.31    2.45   $1,727,080 
Exercised   1,113,000   $0.70           
Granted   5,633,030    1.65    -    - 
Forfeited   (7,401,100)   (5.24)   -    - 
Outstanding, December  31, 2025   31,838,322   $6.81    2.12   $7,382,321 
                     
Exercisable, December  31, 2025   10,991,168   $4.56    2.51   $3,689,773 
                     
Outstanding, January 1, 2024   35,807,476   $7.33    -    - 
Exercised   135,000   $0.10    -   $- 
Granted   3,673,500    1.17    -    - 
Forfeited   (6,851,084)   4.25    -    6,112,000 
Outstanding, December 31, 2024   32,493,392   $7.31    2.45   $1,727,080 
                     
Exercisable, December 31, 2024   10,977,431   $4.40    2.25   $1,409,651 

 

The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during 2025 and 2024.

 

   December 31, 2025   December 31, 2024 
   Range 
         
Stock price   1.11 - 2.42    4.4 
Exercise price   0 - 14    0 - 14 
Expected life (in years)   2.50- 3.47 yrs.    2.50- 4.00 yrs. 
Volatility   101 – 110%    36.7 – 96.5% 
Risk-fee interest rate   3.56 - 4.02%    3.50 - 4.62% 
Dividend yield   -    - 

 

Prior to the second quarter of 2025, the Company did not have historical stock prices that could be reliably determined for a period that is at least equal to the expected terms of its options. The expected options terms, which were calculated using the plain vanilla method, are 3.5 years, and its historical period was 3 years. The Company relied on the expected volatility of comparable peer-group publicly traded companies within its industry sector, to supplement the Company’s historical data for the period of the expected terms of the options that exceeded the period of the Company’s historical volatility data. As of May 1, 2025, the Company uses its historical stock prices to determine its expected volatility.

 

 

(D) Warrants Issued

 

The following is a summary of the Company’s warrant activity during 2025 and 2024:

 

   Number of Warrants   Weighted Average
Exercise Price		 
         
Balance, January 1, 2025   1,523,667   $4.30 
Issued   64,750    1.2 
Exercised   -    - 
Forfeited   -    - 
Balance, December  31, 2025   1,588,417   $4.19 
           
Balance, January 1, 2024   2,063,522   $5.76 
Issued   —    — 
Exercised   —    — 
Forfeited   (539,885)   9.8 
Balance, December 31, 2024   1,523,667   $4.30 

 

During year ended December 31, 2025 and 2024, the Company did not issue any warrants except for warrants issued to a placement agent in connection with its Series A -1 Preferred offerings in the second quarter of 2025.

 

(E) Restricted stock units

 

A summary of the Company’s non-vested restricted stock units during 2025 and 2024 are as follows.

 

      Weighted 
       Average Grant 
   Shares   Due Fair Value 
Non-vested restricted stock units, January 1, 2025   6,278,370   $2.65 
Granted   6,537,012    1.39 
Vested   (6,655,463)   1.60 
Forfeited   (1,171,102)   5.36 
Non-vested restricted stock units, December  31, 2025   4,988,817   $1.76 
           
Non-vested restricted stock units, January 1, 2024   4,935,822   $7.99 
Granted   6,168,980    1.12 
Vested   (4,513,527)   2.27 
Forfeited   (312,905)   2.58 
Non-vested restricted stock units on December 31, 2024   6,278,370   $2.65 

 

The weighted-average remaining contractual life of the restricted units as of December 31, 2025, is 1.32 years.

 

RSUA give the right to receive one share of the Company’s common stock. RSUAs that are vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSU with a market condition. Compensation with respect to RSUA awards is expensed on a straight-line basis over the vesting period.

 

The Company recognized compensation expenses of $ 10,420,491, and $10,078,955, respectively, related to RSUs and RSAs during the year ended December 31, 2025 and 2024, respectively. The Company recognized compensation expenses of $ 3,139,881 and $3,395,479, respectively, related to stock options during the year ended December 31, 2025 and 2024, respectively.

 

The options and RSUAs are granted to the Company’s employees, board members, and certain consultants. There is no difference in characteristics of the awards other than the stock options have to be exercised and restricted awards and units do not. The vesting of the options, restricted stock units or awards is based on the requisite service period of the employees and the non-employee’s vesting period is generally based on a period of up to six years. The maximum contractual term of the options is up to 5 years. The number of shares available for grant of options, and restricted stock units or awards amounts to 19,717,706 at December 31, 2025.

 

 

Unamortized future stock-based compensation expense was $9.25 million as of December 31, 2025.