NOTE 9 – STOCKHOLDERS’ EQUITY

As of December 31, 2025, the following describes the various types of the Company’s securities:

Common Stock

Voting Rights. Holders of shares of common stock are entitled to one vote per share held of record on all matters to be voted upon by the stockholders. The holders of common stock do not have cumulative voting rights in the election of directors.

Dividend Rights. Holders of shares of our common stock are entitled to ratably receive dividends when and if declared by our board of directors out of funds legally available for that purpose, subject to any statutory or contractual restrictions on the payment of dividends and to any prior rights and preferences that may be applicable to any outstanding preferred stock. Please read “Dividend Policy.”

Liquidation Rights. Upon our liquidation, dissolution, distribution of assets or other winding up, the holders of common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities and the liquidation preference of any of our outstanding shares of preferred stock.

Other Matters. The shares of common stock have no preemptive or conversion rights and are not subject to further calls or assessment by us. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of our common stock, are fully paid and non-assessable.

Common Stock Option Transactions

A 2016 Stock Incentive Plan (2016 Plan) was approved by the Board during January 2016. The Company may grant up to 6,363,225 shares of Series A Preferred stock under the 2016 Plan. Options issued under the 2016 Plan vest upon issuance.

A 2018 Stock Option Plan (2018 Plan) was approved by the Board on July 1, 2018, and amended on July 16, 2020. The Company may grant up to 4,000,000 shares of common stock under the 2018 Plan. Options under the 2018 Plan vest as determined by the Board.

Total stock‑based compensation expense for grants to officers, employees, and consultants was $7,132,466 and $3,725,484 for the years ended December 31, 2025 and 2024, respectively, related to continuing operations, which was charged to general and administrative expense. As of December 31, 2025, the Company had $3,164,126 of unrecognized compensation cost related to unvested stock options, net of forfeitures. This cost is expected to be recognized over approximately five years on a weighted‑average basis.

The Company used the simplified method under SAB 107 to estimate the expected term for options granted prior to 2025. This method is permitted for companies with limited historical exercise data and provides a reasonable estimate of expected term consistent with SEC guidance.

Stock Option Activity

*During the year ended December 31, 2025, certain stock option exercises were settled on a cashless (net settlement) basis, whereby shares otherwise issuable upon exercise were withheld by the Company solely to satisfy the exercise price. No shares were withheld for tax withholding obligations, and the Company did not remit any cash to tax authorities in connection with these exercises.

As a result of these net settlements, a total of 577,676 shares were issued as reflected in the Company’s Statement of Stockholders’ Equity. The difference between options exercised and shares issued represents shares withheld in connection with the cashless exercise feature.

Vested vs Nonvested Stock Option Activity

Equity classified warrants

On June 9, 2021, the Company issued Common Stock Purchase Warrant “C-38” in conjunction with a common stock offering. The warrant provides the option to purchase 2,150,000 Class A Common Shares at a price of $3.50 and carried a 5 year term. The warrants expire on June 9, 2026.  On October 14, 2025, the C-38 Common Stock Purchase Warrant was exercised with the company receiving $7,525,000 in cash proceeds.

On June 9, 2021, the Company issued Common Stock Purchase Warrant “C-39” in conjunction with a common stock offering. The warrant provides the option to purchase 2,150,000 Class A Common Shares at a price of $3.50 and carry a 5 year term. The warrants expire on June 9, 2026.

On July 28, 2022, the Company issued Common Stock Purchase Warrant “A-12” in conjunction with an IR Services. The warrant provides the option to purchase 60,000 Class A Common Shares at a price of $3.50 and carried a 4 year term. The warrants expire on July 28, 2026.  On October 21, 2025, the A-12 warrant was exercised cashlessly resulting in the issuance of 12,807 common shares and no net proceeds to the Company. 

The Company records and classifies issued and outstanding warrants based upon the terms and factors of their issuance.  Warrants issued for services are corded as period expenses matching the services delivered; warrants issued for settlement of payables or debt are recorded as either a gain or loss on settlement; and warrants issued in connection with capital transactions are recorded within the statement of stockholders equity and additional paid in capital.

 Warrant Activity

*During the year ended December 31, 2025, certain warrant exercises were settled on a cashless (net settlement) basis, whereby shares otherwise issuable upon exercise were withheld by the Company solely to satisfy the exercise price. No shares were withheld for tax withholding obligations, and the Company did not remit any cash to tax authorities in connection with these exercises. As a result of these net settlements, a total of 2,162,808 shares were issued as reflected in the Company’s Statement of Stockholders’ Equity. The difference between warrants exercised and shares issued represents shares withheld in connection with the cashless exercise feature.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted‑average number of shares of common stock outstanding during the period.

Diluted earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted‑average number of shares of common stock outstanding, adjusted to reflect the potential dilution from stock options and warrants using the treasury stock method.

Potentially dilutive securities are excluded from the diluted earnings (loss) per share calculation when their inclusion would be anti‑dilutive, including in periods in which the Company reports a net loss.