v3.26.3
Changes in Stockholders’ Equity
 9 Months Ended
Sep. 30, 2026
Equity [Abstract]  
Changes in Stockholders’ Equity

Note 11 – Changes in Stockholders’ Equity

 

Class A Common Stock

 

The Company has 100,000,000 authorized shares of $0.001 par value Class A common stock, and 13,850,279 and 11,339,169 shares were issued and outstanding as of September 30, 2026, and December 31, 2025, respectively.

 

On August 17, 2026, a total of 11,110 shares of Class A Common Stock were issued for cashless exercise of Series B Warrants into Class A common stock.

 

On May 11, 2026, a total of 250,000 shares of Class B Common Stock were converted into 2,500,000 shares of Class A common stock according to the terms of the Company’s Certificate of Incorporation.

 

On June 16, 2025, the Board of Directors of the Company appointed Priya Prasad, the Company’s CFO and COO, as interim CEO. The Company agreed to pay Ms. Prasad an interim CEO allowance of $6,100 per month, and award 122,000 shares of Class A common stock, which vest upon milestones being met as determined by the Board, including appointment of a permanent CEO, retention of key staff, stabilization of client relationships and adoption of an updated strategic plan for the Company. As of September 30, 2026, the Board has not approved the milestones being met, and accordingly, no stock-based compensation expense has been recognized related to this award.

 

On July 1, 2025, the Company entered into a consulting agreement with a former member of the Board of Directors for services related to developing a new strategic plan for the Company and identifying and hiring a new CEO. The agreement was in effect through December 31, 2025, and the Company awarded 25,000 restricted stock units (“RSU’s”) of the Company’s Class A common stock to the consultant. As of December 31, 2025, the Board determined that achievement of the milestones was completed, however, no options were issued and stock-based compensation expense has been recognized related to this award.

 

 

In August, 2026, the Board of Directors of the Company granted 74,009 restricted stock units (RSUs) to an officer and employees, of which one-third (1/3rd) of the RSUs vest on January 1, 2027 (the first anniversary of the Vesting Commencement Date of January 1, 2026), and an additional one-third (1/3rd) vest on each January 1 anniversary thereafter through January 1, 2029, on a unified three (3) year vesting schedule. The Company recognized $10,463 of stock-based compensation expense related to the RSUs during the nine months ended September 30,2026.

 

Additionally, the Board of Directors of the Company granted 485,154 performance stock units (PSUs) to officers and employees, subject to achievement of performance and service conditions, and shall vest in three (3) equal annual Tranches of one-third (1/3rd) each, commencing January 1, 2026, subject to (a) the performance conditions set forth in Section 4 and (b) the Grantee’s continued employment through the applicable Compensation Committee certification date. The first tranche PSUs performance conditions include 1) meeting targets for of cash balances as of December 31, 2026 of at least $2,000,000 for 50% vesting with $2,500,000 as the target for 100% vesting; 2) Adjusted EBITDA of $500,000 for the year ended December 31, 2026; and 3) Revenue of at least $10,000,000 for 50% vesting and $12,000,000 for 100% vesting. The targets are weighted 40% for revenue and profitability measures and 20% for year end cash balances. The second and third tranche of shares will have performance metrics set by the Board of Directors in 2027 and 2028. As such, those awards were not deemed to have met the criteria under ASC 718 to determine a grant date until metrics are established. The Company estimated the fair value of the first tranche of 161,718 PSUs to be $125,103 and expects to vest 60% of those shares based on current financial projections. The Company recognized $21,351 of stock-based compensation expense during the three months ended September 30, 2026, and expects to recognize an additional $103,752 related to shares expected to vest.

 

During the nine months ended September 30, 2026, the Company recognized aggregate stock-based compensation expense of $31,814 related to the amortization of restricted stock unit and performance stock unit awards granted to officers and employees. Additionally, the Company recognized $57,871 of stock-based compensation expense related to the amortization of Class A common stock options issued to directors, employees, and consultants for services.

 

On August 13, 2025, the Company appointed a new director to the Board of Directors of the Company. In connection with the appointment, the director will receive $20,000 in annual cash compensation and receive an equity award representing 0.25% of the Company’s fully diluted Class A Common Stock in the form of stock options as of December 31, 2025. As of December 31, 2025, a grant date had not been established as the terms of the award had not been finalized.

 

During the nine months ended September 30, 2025, two investors exercised 23,125 warrants to purchase Class A Common stock pursuant to which the Company received cash proceeds of $14,800.

 

On January 15, 2025, a total of 233,334 shares of Class B Common Stock previously held by the Company’s Executive Chairman and President, Sandeep Allam, upon his passing, automatically converted into 2,333,340 shares of Class A common stock according to the terms of the Company’s Certificate of Incorporation.

 

During the nine months ended September 30, 2025, the Company issued 3,500 shares of Class A common stock to several employees in exchange for services rendered. The Company recognized stock-based compensation expense equal to the fair value of the shares on the grant date.

 

During the nine months ended September 30, 2025, the Company recognized expense of $44,235 related to common stock options. Additionally, the Company recognized $30,955 of stock-based compensation expense related to the amortization of Class A common stock options issued for services.

 

Class A Common Stock Warrants

 

The following is a summary of activity of outstanding stock warrants:

 

       Weighted Average 
   Number of Shares   Exercise Prices 
Balance, December 31, 2025   8,172,842   $1.79 
Warrants granted   -    - 
Warrants expired   (3,180,000)   (0.64)
Warrants exercised   (11,110)   (0.64)
Warrants cancelled   -    - 
Balance, September 30, 2026   4,981,732   $2.52 
Exercisable, September 30, 2026   4,981,732   $2.52 

 

 

The warrants had a weighted average remaining life of 2.64 years and no intrinsic value as of September 30, 2026.

 

Convertible Class B Common Stock

 

The Company has 5,000,000 authorized shares of $0.001 par value convertible Class B common stock and had 600,000 shares issued and outstanding as of December 31, 2025, as retrospectively applied, pursuant to the Company’s subsequent recapitalization in 2022 and effective as of May 3, 2022, whereby the founders exchanged their 83,334 Founders Shares for 833,334 shares of convertible Class B common stock.

 

On May 11, 2026, a total of 250,000 shares of Class B Common Stock were converted into 2,500,000 shares of Class A common stock according to the terms of the Company’s Certificate of Incorporation.

 

As of September 30, 2026, and December 31, 2025, the Company had 350,000 and 600,000 Class B common stock shares were issued and outstanding, respectively.