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

NOTE 11 – STOCKHOLDERS’ EQUITY

 

Non-Compensatory Stock Options

 

Effective December 18, 2017, the Company completed an Agreement and Plan of Merger whereby a newly formed wholly owned subsidiary merged with and into KonaTel Nevada, and under which KonaTel Nevada was the surviving corporation and became a wholly owned subsidiary of the Company. Mr. McEwen was the sole shareholder of KonaTel Nevada and received merger consideration of 13,500,000 shares of the Company’s common stock and 1,500,000 non-compensatory options to acquire shares of the Company’s Common Stock under the merger, at an exercise price of $0.22 per share, vesting quarterly, from March 18, 2018, to December 18, 2019.

 

On September 17, 2024, the Company’s Board of Directors adopted resolutions to extend D, Sean McEwen’s expiration dates on his last two (2) 187,500 share option tranches by one (1) year, or to respectively expire at midnight on September 17, 2025, and December 17, 2025. On September 17, 2025, Mr. McEwen exercised these last two tranches of stock options.

 

Stock Compensation

 

The Company offers incentive stock option equity awards to directors and key employees. Options vest in tranches and typically expire in five (5) years. During the year ended December 31, 2025, and 2024, the Company recorded options expense of $126,578 and $992,735, respectively. The option expense not taken as of December 31, 2025, is $2,087,605, with a weighted average term of 2.06 years.

 

The Aggregate Intrinsic Value is based on the market value of the Company’s common stock of $0.30 on December 31, 2025.

 

The estimated grant date fair value of stock option grants was calculated using the Black-Scholes-Merton option-pricing model using the following assumptions:

 

   2025   2024 
Weighted average volatility   100.44%   170.23%
Weighted average expected term (years)   5.00    5.00 
Risk free interest rate   4.18%   4.54%
Expected dividend yield   —     —  

 

 

The following table represents incentive stock option activity as of and for the year ended December 31, 2025:

 

   Number of   Weighted Average   Weighted Average   Aggregate 
   Shares   Exercise Price   Remaining Life   Intrinsic Value 
                 
Options Outstanding – December 31, 2024   5,650,000   $0.78    3.80   $612,418 
Granted   —    —    —    — 
Exercised   550,000    0.13    —    — 
Forfeited   1,605,000    —    —    — 
Options Outstanding – December 31, 2025   3,495,000    0.44    1.04    - 
                     
Exercisable and Vested, December 31, 2025   2,181,664    0.63    1.42    (720,656)

 

The following table represents stock option activity as of and for the year ended December 31, 2024:

 

  

Number of

Shares

  

Weighted Average

Exercise Price

  

Weighted Average

Remaining Life

  

Aggregate

Intrinsic Value

 
                 
Options Outstanding: December 31, 2023   6,000,000   $0.75    3.69   $872,463 
Granted   100,000    0.47    —    — 
Exercised   450,000    0.41    —    — 
Forfeited   —    —    —    — 
Options Outstanding: December 31, 2024   5,650,000   $0.78    3.80   $612,418 
                     
Exercisable and Vested: December 31, 2024   54,163   $0.51    1.72   $(18,110)

 

In 2024, 100,000 share incentive stock options were granted to one (1) employee of the Company. During the year ended December 31, 2024, 375,000 shares were exercised by D. Sean McEwen, CEO, and 75,000 shares were exercised by one (1) independent member of the Board of Directors. During the year ended 2025, no incentive stock options were granted. During the year ended December 31, 2025, 375,000 shares were exercised by D. Sean McEwen, CEO, and 125,000 shares were exercised by two (2) independent members of the Board of Directors. 50,000 shares were exercised by one (1) former independent member of the Board of Directors. During the year ended 2025, 1,605,000 partially vested share options were forfeited by three (3) key employees of the Company. The Aggregate Intrinsic Value is based on the market value of the Company’s common stock of $0.30 on December 31, 2025.