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STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

 

Series A Preferred Stock

 

The Company is authorized to issue 100,000 shares of $0.001 par value Series A preferred stock (“Series A”). There were fourteen (14) shares of Series A preferred stock outstanding as of June 30, 2026 and December 31, 2025. Series A stockholders have one vote per share on an “as converted” basis for all matters submitted to a stockholder vote, without the right to cumulative voting in director elections. They are entitled to dividends, if declared by the Company’s board of directors (the “Board of Directors”) from legally available funds, distributed pro rata based on their Series A holdings on an as-converted basis. In the event of liquidation or dissolution, Series A stockholders share ratably in any remaining assets after liabilities are paid, with no liquidation preferences. Each Series A share is convertible into 82 shares of common stock at the stockholder’s discretion.

 

Common Stock

 

As of June 30, 2026 and December 31, 2025, the Company was authorized to issue 105,263,158 shares of common stock with a par value of $0.001 per share. The number of shares outstanding was 42,003,934 as of June 30, 2026 and 40,488,934 as of December 31, 2025. Common stockholders are entitled to one vote per share on all matters submitted to a stockholder vote, without the right to cumulative voting in director elections. They are eligible for dividends, if declared by the Board of Directors from legally available funds, subject to the prior rights of any outstanding preferred stock and any contractual restrictions on dividend payments. In the event of liquidation or dissolution, common stockholders share ratably in any assets remaining after payment of liabilities and satisfaction of liquidation preferences of any outstanding preferred stock. Common stock carries no preemptive or subscription rights and is not convertible into other securities.

 

Stock Issued to Management

 

On January 16, 2026, the Board approved 1,500,000 fully vested restricted shares to certain executives with a lock up period that extends until December 31, 2027. The stock price on the date of issuance was $0.34 per share. During the six months ended June 30, 2026, the Company recorded an expense of $503 related to the issuance.

 

Stock Issued to a Consultant

 

On February 23, 2026, the Company issued a former consultant 15,000 shares of restricted stock related to a previous arrangement. The stock price on the date of issuance was $0.35 per share and the Company recorded an expense of $5 related to the issuance.

 

Stock Options

 

The Company grants stock options as part of employee and board of director compensation and recognizes these options’ expense over the vesting period. If an employee does not meet certain conditions such as sales targets or leaves the Company before the options vest, these options are forfeited as they occur.

 

On December 7, 2021, the Board of Directors authorized the Company’s Equity Incentive Plan in order to facilitate the grant of equity incentives to employees (including our named executive officers), directors, independent contractors, merchants, referral partners, channel partners and employees of the Company’s to enable the Company to attract, retain and motivate employees, directors, merchants, referral partners and channel partners, which is essential to its long-term success.

 

On May 28, 2026, the Company's stockholders approved the 2026 Equity Incentive Plan, authorizing an additional 4,500,000 shares of common stock for issuance under the plan and cancelling the previous reserved shares. As of June 30, 2026, 4,488,009 shares are available for issuance.

 

On January 16, 2026, the Board ratified the acceleration of previously granted stock options for certain executive officers effective. As part of the resolution, 937,500 non-plan options, with a ten-year expiration term, a fair value on the grant date of $0.86, and an exercise price of $0.97 per share vested. The Company recorded an expense of $844 thousand.

 

During the six months ended June 30, 2026, the Company granted 1,550,000 options to purchase common stock. The grants included:

 

1) 700,000 options were awarded to the current board of directors. The fair value of these options, which are non-plan with a five-year expiration term, total $215 thousand. These options have an exercise price of $0.34 per share and a weighted average fair value of $0.31 per share on the issuance date. They are fully vested.

 

2) On January 16, 2026, the Company granted 850,000 options to certain members of the management team with an exercise price of $0.34, a five-year expiration term, and a fair value on the grant date ranging from $0.26 to $0.31. Half of the options are fully vested upon the grant date and the others vest on December 31, 2027.
   

The following table summarizes option activity:

                 
    Number of
shares		     Weighted
Average
exercise price		     Weighted
Average
remaining years		  
Outstanding December 31, 2025     5,402,354     $ 0.83       7.25  
Issued     1,550,000       0.34       –  
Cancelled     –       –       –  
Outstanding as of June 30, 2026     6,952,354     $ 0.72       6.07  
Outstanding as of June 30, 2026, vested     6,039,854     $ 0.70       6.58  

 

During the six months ended June 30, 2026, the Company recorded $1,218 in option expenses. The Company expects to recognize an additional $83 through December 2027.

 

The options vest in equal monthly installments ranging from immediately to 12 months. For the six months ended June 30, 2026, the fair value of the options were valued using a Black-Scholes option pricing model with the following assumptions:

     
Market value of common stock on issuance date   $0.34 - $1.01  
Exercise price   $0.34 - $3.00  
Expected volatility   138% - 151%  
Expected term (in years)   5.0  
Risk-free interest rate   3.99%  
Expected dividend yields   –  

 

Expected Volatility – The Company now has sufficient operating history and company-specific historical data to determine its expected volatility assumption directly from its own traded stock price. Rather than examining the historical volatilities of a group of industry peers, the Company calculates its volatility based on the fluctuations in its own share prices, which are publicly available. The Company expects to continue using this approach going forward, relying on its own historical stock price data to assess volatility.

 

Expected Term – The expected term of stock options represents the weighted average period the stock options are expected to be outstanding. Given the limited historical exercise data of the Company’s stock options, the Company uses the simplified method for estimating the expected term, which calculates the expected term as the average time-to-vesting and the contractual life of the options for stock options issued to participants.

 

Risk-Free Interest Rate – The risk-free rate assumption is based on U.S. Treasury instruments, the terms of which were consistent with the expected term of the Company’s stock options.

 

Expected Dividend – The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid any dividends to date and does not intend to pay dividends.

 

Forfeitures are recognized as they occur. Plan related forfeitures are added back to the equity incentive plan.

 

Warrants

 

As of June 30, 2026, the Company has 29,781,627 warrants outstanding. The following table summarizes warrant activity:

            
   Number of
Warrants		   Weighted
Average
exercise price		   Weighted
Average
remaining years		 
Outstanding December 31, 2025   28,781,627   $1.72    3.86 
Cancelled   –    –    – 
Issued   1,000,000    1.00    – 
Outstanding as of June 30, 2026   29,781,627   $1.70    3.41 

 

See Note 6 for warrants issued with convertible note.