v3.26.1
STOCKHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 9 STOCKHOLDERS’ EQUITY

 

(A) Common Stock

 

The Company issued the following common stock during the three months ended March 31, 2026, and 2025:

 

Transaction Type  Shares Issued   Valuation $  

Average Value

Per Share

 
2026 Equity Transactions               
Common stock issued, pursuant to services provided   1,460,641    3,097,885   $2.12 
Common stock issued pursuant to stock at the market offering, net   12,000,000    27,392,004    2.28 
Common stock issued pursuant to preferred dividends   5,526    8,044    1.46 
Common stock issued pursuant to conversion of notes and accrued interest   240,648    527,786    2.19 
Common stock issued pursuant to exercise of options and warrants   1,301,667    1,911,101    1.47 
Common stock issued pursuant to conversion of preferred stock   812,501    975,000    1.20 
                
2025 Equity Transactions               
Common stock issued, pursuant to services provided   1,117,964   $3,041,157   $1.16 – 1.87 
Common stock issued pursuant to stock at the market offering, net   223,756    450,428     2.0 – 2.08 
Common stock issued pursuant to conversion of preferred stock   250,000    500,000    2.00 

 

(B) Preferred Stock

 

The following is a summary of the Company’s Preferred Stock activity during the three months ended March 31, 2026 and 2025:

 

Transaction Type  Quantity   Carrying Value   Value per Share, gross 
Preferred Stock Series A-1 Balance at January 1, 2026   292,000   $7,124,167   $25 
Conversion to common stock   (39,000)   (975,000)   25 
Preferred Stock Series A-1 Balance at March 31, 2026   253,000   $6,149,167   $25 
                
Preferred Stock Series A-2 Balance at January 1, 2026   60,000   $1,500,000   $25 
Preferred Stock Series A-2 Balance at March 31, 2026   60,000   $1,500,000   $25 

 

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   40,000    1,000,000    25 
Conversion to common stock   (20,000)   (500,000)   25 
Preferred Stock Series A-1 Balance at March 31, 2025   260,000   $6,500,000   $25 

 

During the three months ended March 31, 2026, holders converted an aggregate of 39,000 shares of Series A-1 Preferred Stock into 812,501 shares of common stock at a conversion price of 1.20 per share.

 

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-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 and Restricted Stock

 

The following is a summary of the Company’s stock option activity during the three-months ended March 31, 2026, and 2025:

 

Options  Shares  

Weighted

Average

Exercise Price

  

Weighted

Average

Remaining

Contractual

Life

(In Years)

  

Aggregate

Intrinsic

Value

 
Outstanding, January 1, 2026   31,838,322   $6.81    2   $7,382,321 
Exercised   35,000   $0.97    -   $- 
Granted   70,500    1.12    -    - 
Forfeited   (222,536)   (6.08)   -    - 
Outstanding, March 31, 2026   31,721,286   $6.80    1.91   $264,990 
                     
Exercisable, March 31, 2026   12,010,702   $4.26    2.50   $152,798 
                     
Outstanding, January 1, 2025   32,493,392   $7.31    -    - 
Granted   1,358,030    1.26    -    - 
Forfeited   (2,407,434)   9.75    -    - 
Outstanding, March 31, 2025   31,443,988   $6.86    2.33   $1,624,810 
                     
Exercisable, March 31, 2025   11,697,698   $4.31    2.05   $1,380,058 

 

The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during the three months ended March 31, 2026, and 2025:

 

   31-Mar-26   31-Mar-25 
   Range 
         
Exercise price and stock price  $1.12   $1.26 
Expected life (in years)   2.77    2.60- 3.47  
Volatility   86.84%   102.29%
Risk-free interest rate   3.81    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.

 

 

A summary of the Company’s non-vested restricted stock units during the three months ended March 31, 2026, and 2025 are as follows:

 

   Shares  

Weighted

Average Grant

Due Fair Value

 
Non-vested restricted stock units, January 1, 2026   4,988,817   $1.76 
Granted   863,039    - 
Vested   (1,779,465)   1.24 
Forfeited   (50,000)   - 
Non-vested restricted stock units, March  31, 2026   4,022,391   $1.59 
           
Non-vested restricted stock units, January 1, 2025   6,278,370   $2.65 
Granted   1,900,978    1.26 
Vested   (1,242,872)   2.13 
Forfeited   (586,297)   9.11 
Non-vested restricted stock units on March 31, 2025   6,350,179   $1.69 

 

The weighted-average remaining contractual life of the restricted units as of March 31, 2026, is 1.14 years.

 

Each share of restricted stock gives the right to receive one share of the Company’s common stock upon vesting. Restricted stock 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 restricted stock with a market condition. Compensation with respect to restricted stock units and awards is expensed on a straight-line basis over the vesting period.

 

The Company recognized compensation expenses of $2,694,938, and $2,411,650, respectively, related to RSUs and RSAs during the three-month period ending March 31, 2026 and 2025. The Company recognized compensation expenses of $930,732 and $629,507, respectively, related to stock options during the three-month period ending March 31, 2026 and 2025.

 

The options and restricted stock units and awards 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 19,059,167 at March 31, 2026.

 

(D) Warrants

 

The following is a summary of the Company’s warrant activity during the three months ended March 31, 2026, and 2025:

 

  

Number of

Warrants

  

Weighted Average

Exercise Price

 
Balance, January 1, 2026   1,588,417   $5.50 
Issued   -    - 
Exercised   (1,266,667)   4.19 
Forfeited   -    - 
Balance, March 31, 2026   321,750    8.87 
           
Balance, January 1, 2025   1,523,667   $4.30 
Issued   -    - 
Exercised   -    - 
Forfeited   -    - 
Balance, March 31, 2025   1,523,667   $4.30