Note 9 – Stockholders’ Equity

Common Stock

As of March 31, 2026 the Company had 975,000,000 shares of Common Stock, $0.001 par value, authorized, of which 49,775,371 shares were issued and outstanding.

At The Market Offering Agreement

The Company has an At-The-Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as agent (“H.C. Wainwright”), pursuant to which the Company may offer and sell, from time-to-time, shares of the Company’s Common Stock. The ATM Agreement operates under the Company’s effective registration statement, which registers up to $2,000,000,000 of securities for potential future issuance, and provides for a commission to H.C. Wainwright of up to 3.0% of the gross proceeds from sales.

During the three months ended March 31, 2026, the Company did not sell any shares of Common Stock under the ATM Agreement. During the three months ended March 31, 2025, the Company sold a total of 127,249 shares of Common Stock under the ATM Agreement for aggregate gross proceeds of approximately $238,000 at an average selling price of $1.87 per share, resulting in net proceeds of approximately $229,000 after deducting commissions and other transaction costs.

Share Repurchase Program

The Company has a share repurchase program authorizing the repurchase of up to $50 million of its common stock. Repurchases may be made from time to time in the open market or in privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934 and applicable state law. The Company has engaged H.C. Wainwright & Co., LLC as the sole broker to implement the program. Repurchases are subject to certain pricing and timing limitations, including those related to the Company’s fair value and named executive officer trading plans. The program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended, or discontinued at any time.

During the three months ended March 31, 2026, the Company did not repurchase any shares of its common stock. As of March 31, 2026, approximately $46,000,000 remained available for repurchases under the authorization.

Stock Purchase Warrants

The following is a summary of warrant activity for the three months ended March 31, 2026:

 Summary of Warrant Activity

As of March 31, 2026, no warrants were classified as derivative liabilities, as all liability-classified warrants expired during the period. The remaining warrants issued in connection with the convertible notes are classified as equity.

Preferred Stock

Series V

In 2023, the Company issued Series V Preferred Stock to shareholders on a one-for-one basis. The Series V is non-convertible, has a 20% liquidation preference over common stock, is non-voting, and includes certain rights to dividends and distributions at the discretion of the Board.

In 2024, stockholders approved an amendment to the Certificate of Designation to provide the Board discretion to convert each share of Series V into one share of common stock. As of March 31, 2026, the Board has not elected to convert any Series V shares.

As of March 31, 2026, the Company had Series V Preferred Stock authorized, of which 15,671,405 shares were issued and outstanding as of March 31, 2026.

Certain shares of Series V Preferred Stock have been issued as restricted shares in connection with the conversion of RSUs to restricted shares of common stock in prior periods. These restricted shares remain subject to the original vesting conditions of the underlying RSU awards, including market-based and service-based vesting criteria.

As of March 31, 2026, the Company had approximately 278,000 restricted shares of Series V Preferred Stock outstanding. These restricted shares do not participate in voting rights and are subject to forfeiture if the underlying vesting conditions are not satisfied.

Share-Based Compensation

Share-based compensation, including options, RSUs, restricted shares, and share payments, may be granted to directors and employees of the Company under the Company’s 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan became effective on January 1, 2021, was approved by shareholders on March 31, 2021, and was amended on June 13, 2022. On July 11, 2023, the Company received shareholder approval to increase the number of shares authorized for issuance under the 2021 Plan from 7,000,000 shares to 12,000,000 shares.

As of March 31, 2026, the Company had approximately 205,647 shares remaining available for future grants under the 2021 Plan, after giving effect to RSU awards granted under the 2026 LTI Program that were issued within the existing authorized share limit.

During the three months ended March 31, 2026, the Company approved additional RSU awards under the 2026 LTI Program in excess of the number of shares currently authorized for issuance under the 2021 Plan. The portion of such awards that exceeds the currently authorized share limit is subject to stockholder approval of an increase in the number of authorized shares at the Company’s 2026 Annual Meeting of Stockholders. No shares underlying such awards will be issued unless and until stockholder approval is obtained.

For accounting purposes, RSUs approved within the existing authorized share limit are considered granted as of January 1, 2026. RSUs approved in excess of the currently authorized share limit are not considered granted for accounting purposes until stockholder approval is obtained.

However, for the three months ended March 31, 2026, the Company has included all RSUs approved under the 2026 LTI Program in the RSU activity and ending balances presented below and has recognized stock-based compensation expense for such awards based on an estimated fair value using the closing price of the Company’s common stock on January 1, 2026, consistent with ASC 718 guidance for awards with unresolved grant date conditions.

Upon receipt of stockholder approval, the Company will establish the grant date for such awards and will remeasure the fair value based on the closing price of the Company’s common stock on the grant date. Any difference between the estimated fair value and the grant date fair value will be recognized as an adjustment to stock-based compensation expense on a prospective basis over the remaining requisite service period.

RSUs and Restricted Shares

The Company grants RSUs, including long-term incentive (“LTI”) awards, to employees and officers under its equity incentive plans as part of its overall compensation and retention strategy. RSUs are generally subject to service-based vesting conditions and, in certain cases, market-based performance conditions.

In certain circumstances, RSUs may be settled through the issuance of restricted shares of common stock, including in connection with tax elections or other administrative considerations, while retaining the original vesting conditions of the underlying awards. Certain RSUs are entitled to dividend equivalents, including Series V preferred stock, and may be settled in a combination of common stock and Series V preferred stock, as applicable.

RSU forfeitures represent unvested awards that were cancelled in connection with employee departures in the ordinary course of business.

The following tables present the activity in RSUs and restricted shares for the three months ended March 31, 2026, followed by additional detail regarding the nature, valuation, and vesting conditions of such awards.

RSU Activity Rollforward

 Summary of RSU Activity Rollforward

The RSU activity presented above includes all RSUs approved under the 2026 LTI Program, including awards subject to stockholder approval for additional authorized shares under the 2021 Plan.

Restricted Stock Activity Rollforward

Summary of RSU Activity Rollforward 

Restricted shares of common stock outstanding primarily relate to RSUs that were previously converted into restricted shares, including in connection with tax planning strategies (e.g., Section 83(b) elections), and continue to be subject to the original vesting conditions of the underlying awards.

The outstanding and nonvested balance of restricted shares as of December 31, 2025 primarily represents legacy LTI awards that were previously converted from RSUs and are subject to a combination of market-based performance conditions (including a requirement for the Company to achieve a specified market capitalization threshold of $300 million) and service-based vesting conditions. During the three months ended March 31, 2026, the increase in nonvested restricted shares primarily reflects the conversion of RSUs granted under the 2026 LTI Program into restricted shares, which continue to be subject to their respective vesting conditions. Compensation expense for awards subject to market conditions is recognized regardless of whether the market condition is ultimately achieved.

Granted Shares - LTI RSU Issuances (2026)

Aggregate RSU Awards and Share Availability

During the three months ended March 31, 2026, the Board approved a long-term incentive program for 2026 (the “2026 LTI Program”) that contemplates the issuance of restricted stock units, certain of which were granted pursuant to the Company’s 2021 Equity Incentive Plan, as described below, and certain of which will be subject to the availability of additional shares under the Plan and any required stockholder approvals.

During the three months ended March 31, 2026, the Company approved an aggregate of 5,424,248 RSUs under the 2026 LTI Program. Of these awards, 2,712,108 RSUs were approved within the existing authorized share limit under the 2021 Plan, and 2,712,140 RSUs are subject to stockholder approval of an increase in authorized shares under the Plan. The amounts presented above reflect RSUs approved by the Board during the period and are not adjusted for subsequent forfeitures. Such forfeitures are reflected in the RSU activity rollforward presented above.

The allocation of RSUs between awards granted under the Plan and those subject to stockholder approval, as well as the timing of issuance, depends on share availability and the receipt of such stockholder approval. No shares of common stock underlying RSUs will be issued until the applicable RSUs have vested and, with respect to RSUs subject to stockholder approval, such approval has been obtained.

Vesting Framework Applicable to 2026 Long-Term Incentive RSUs

RSUs granted under the 2026 LTI Program vest over a five-year period based on a combination of stock price performance, market capitalization performance, and continued service. Each vesting milestone represents a specified percentage of the total RSUs granted to a recipient, with the number of RSUs that vest upon satisfaction of any milestone determined in accordance with the applicable RSU award agreement and the Plan.

 Schedule of Vesting Trigger

As of March 31, 2026, the Company had 5,272,732 unvested equity awards outstanding under the 2026 LTI Program (net of forfeitures), consisting of RSUs and restricted shares that remain subject to vesting conditions. These awards consisted of:

A portion of these awards has been converted from RSUs into restricted shares of common stock; however, such conversions did not change the underlying vesting conditions or the accounting treatment of the awards.

These awards represent the Company’s primary long-term incentive structure and are expected to result in continued stock-based compensation expense over the remaining vesting periods.

The recognition of this expense will vary based on the vesting conditions of the underlying awards. Expense related to service-based awards will be recognized on a straight-line basis over the requisite service period, while expense related to market-based awards will be recognized over the derived service period regardless of whether the applicable market conditions are ultimately achieved.

Valuation of RSUs

The fair value of RSUs granted with market-based vesting conditions, including stock price and market capitalization targets, was estimated using a Monte Carlo simulation model. The following assumptions were used in the Monte Carlo simulation model for RSUs granted on January 1, 2026:

 Schedule of Weighted-Average Assumptions Used to Estimate Fair Value

The weighted-average grant date fair value of RSUs with market-based vesting conditions was approximately $2.21 per unit.

For RSUs with only service-based vesting conditions that are subject to stockholder approval, a grant date has not yet been established for accounting purposes. Accordingly, the Company has used the closing price of its common stock on January 1, 2026 as an estimate of fair value for purposes of recognizing stock-based compensation expense during the three months ended March 31, 2026. Upon receipt of stockholder approval, the Company will establish the grant date for accounting purposes and will remeasure the fair value of such awards based on the closing price of the Company’s common stock on the grant date. Any difference between the estimated fair value and the grant date fair value will be recognized as an adjustment to stock-based compensation expense on a prospective basis over the remaining requisite service period.

Additional Provisions

Stock price performance milestones are achieved when the closing price of the Company’s common stock equals or exceeds the applicable threshold for 20 consecutive calendar days. Market capitalization performance milestones are achieved when the Company’s market capitalization equals or exceeds the applicable threshold for 20 consecutive calendar days, with market capitalization calculated as the number of shares of common stock outstanding on a given day, as reported by the Company’s transfer agent, multiplied by the closing stock price on such day.

The stock price and market capitalization performance thresholds will be equitably adjusted by the Board or the Compensation Committee to reflect any stock split, reverse stock split, stock dividend, recapitalization, reclassification, or similar transaction, in each case in a manner intended to preserve the original economic intent of the awards.

Continued service milestones vest solely based on the recipient’s continued employment with the Company through the applicable vesting date, subject to the terms of the applicable RSU award agreement and the Plan.

All RSUs granted under the 2026 LTI Program are subject to the terms and conditions of the Plan and applicable RSU award agreements, including provisions relating to forfeiture, termination of service, change in control, and clawback, as applicable.

Conversion of RSUs to Restricted Common Stock

On February 23, 2026, 2,590,897 RSUs were converted into restricted shares of Common Stock issued to executive officers and employees. The restricted shares of Common Stock retain the original vesting conditions of the RSUs, including multiple market capitalization and stock price vesting thresholds, as well as time-based vesting schedules, which range from one to five years. These conversions were made primarily to permit recipients to make elections under Section 83(b) of the Internal Revenue Code.

The conversion of RSUs to restricted shares did not result in incremental compensation cost, as the awards retained the same underlying vesting conditions and fair value measurement established at the original grant date.

All RSUs granted under the 2026 LTI Program are subject to the terms and conditions of the Plan and applicable RSU award agreements, including provisions relating to forfeiture, termination of service, change in control, and clawback, as applicable.

Options

The Company grants stock options to employees and officers under its equity incentive plans as part of its overall compensation and retention strategy. Stock options are generally granted with service-based vesting conditions and contractual terms of up to seven years.

During the three months ended March 31, 2026, stock options were granted primarily in connection with the settlement of performance-based bonuses earned for fiscal year 2025 and paid in equity in January 2026. During the three months ended March 31, 2025, stock options were granted primarily in connection with: (i) the settlement of performance-based bonuses earned for fiscal year 2024 and paid in equity in January 2025; and (ii) sign-on and retention equity awards granted to new employees.

A summary of options activity under the Company’s stock option plan for the three months ended March 31, 2026 and 2025 are presented below:

 Summary of Option Activity

Option forfeitures reflect unvested awards that were cancelled in connection with employee departures in the ordinary course of business.

The following weighted-average assumptions were used to estimate the fair value of options granted during the three months ended March 31, 2026 and 2025, using the Black-Scholes model:

 Schedule of Weighted-Average Assumptions Used to Estimate Fair Value

These assumptions are consistent with the methods described in Note 3 – Summary of Significant Accounting Policies.

Other Share-Based Payments

Performance-Based Compensation

The Company maintains performance-based incentive compensation programs for officers and employees, which may be settled in cash, shares of common stock, stock options, or a combination thereof, as approved by the Board of Directors. Compensation expense related to performance-based bonuses is recognized in the period in which the applicable performance conditions are achieved or deemed probable. Amounts accrued but not yet settled are recorded within Accrued compensation on the balance sheets until payment or issuance.

For the three months ended March 31, 2026, the Company issued 398,208 shares of common stock to officers and employees in January 2026 as part of the settlement of accrued bonus compensation earned for the year ended December 31, 2025. The total fair value of the shares issued was approximately $1,051,000 based on the Company’s closing stock price on the issuance date. Of the shares issued, 87,602 were returned to net settle the issuance and pay related taxes, resulting in a net share issuance of 310,606 shares of common stock. The issuance of shares represents the settlement of previously accrued compensation and did not result in additional stock-based compensation expense during the period.

For the three months ended March 31, 2025, the Company issued 329,110 shares of common stock to officers and employees in January 2025 as part of the settlement of accrued bonus compensation earned for the year ended December 31, 2024. The total fair value of the shares issued was approximately $813,000 based on the Company’s closing stock price on the issuance date. Of the shares issued, 33,731 were returned to net settle the issuance and pay related taxes, resulting in a net share issuance of 295,379 shares of common stock.

Accrued compensation included approximately $251,000 and $1,609,000 related to performance-based bonus accruals as of March 31, 2026 and December 31, 2025, respectively.

Board Compensation

Effective January 19, 2023, the Board approved the issuance of $50,000 of common stock to each independent director, payable in four equal quarterly installments of $12,500, subject to continued service. The number of shares issued is based on the closing price of the Company’s common stock on the last trading day prior to each quarter-end.

For the three months ended March 31, 2026, 26,979 shares of common stock approximating $37,500 were issued to independent directors related to the quarterly approved issuances. For the three months ended March 31, 2025, 25,002 shares of common stock approximating $38,000 were issued to independent directors related to the quarterly approved issuances.

Stock-based Compensation

Stock-based compensation expenses are recorded as a part of general and administrative expenses, compensation expenses and cost of revenues. Stock-based compensation expenses for the three months ended March 31, 2026 and 2025 were as follows:

 Schedule of Stock-based Compensation Expense

As of March 31, 2026, the Company had approximately $1,981,770 of unrecognized stock-based compensation cost related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 0.54 years, and $11,793,973 of unrecognized stock-based compensation cost related to unvested restricted stock and RSU awards, which is expected to be recognized over a weighted-average period of 1.98 years.

A significant portion of the unrecognized compensation cost relates to awards subject to market-based vesting conditions, which may result in variable expense recognition over the remaining service periods of such awards.