Quarterly report [Sections 13 or 15(d)]

Stockholders??? Equity

v3.25.1
Stockholders’ Equity
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
Stockholders’ Equity

Note 14. Stockholders’ Equity

 

Authorized Capital Stock

 

The Company has authorized 5,000,000 shares of preferred stock with a par value of $0.0001.

 

 

The Company has authorized 210,000,000 shares of common stock with a par value of $0.0001, consisting of 200,000,000 shares of Class A Common Stock and 10,000,000 shares of Class B Common Stock. The Class B Common Stock is entitled to 10 votes for every 1 vote of the Class A Common Stock.

 

Class A Common Stock

 

The Company had 18,204,483 and 15,956,816 shares of Class A common stock issued and outstanding as of March 31, 2025 and December 31, 2024, respectively.

 

During the three months ended March 31, 2025, the Company issued 2,247,667 shares of Class A common stock as follows;

 

● 1,162,802 shares for exercise of pre-funded warrants and 1,068,332 shares for exercise of warrants, for which the Company received $2,381,247
● 16,533 shares to prior CFO and a Board member valued at $40,115

 

Class B Common Sock

 

The Company had 100,000 shares of Class B common stock issued and outstanding as of March 31, 2025 and December 31, 2024.

 

Warrants

 

A summary of activity of the warrants during the three months ended March 31, 2025 as follows:

 

 

    Number of     Weighted average     Average  
    shares     Exercise Price     Life (years)  
Outstanding, December 31, 2024     5,402,306     $ 2.50       5.35  
Exercised *     (1,162,802 )     2.25       -  
Exercised     (1,068,332 )     2.25       -  
Outstanding, March 31, 2025     3,171,172     $ 2.68       5.02  
                         
Exercisable, March 31, 2025     2,533,542     $ 2.87       5.10  

 

*   Prefunded warrants issued in December 2024

 

The intrinsic value of the warrants as of March 31, 2025 is $6,046.

 

Stock Options

 

On February 1, 2025, the Company granted 265,000 options with an exercise price of $2.57, with a term of five (5) years to exercise from the grant date to employees of the Company. Options issued vest at 33% of shares subject to the option on each anniversary date, on February 1, 2026, 2027 and 2028.

 

 

The Company utilizes the Black-Scholes model to value its stock options. The Company utilized the following assumptions:

 

    Three months ended  
    March 31,  
    2025  
Expected term     3.50 years  
Expected average volatility     189 %
Expected dividend yield     -  
Risk-free interest rate     4.27 %

 

During the three months ended March 31, 2025, the Company granted 265,000 options valued at $609,330. During the three months ended March 31, 2025 and 2024, the Company recognized stock option expense of $136,452 and $41,698, respectively, and as of March 31, 2025, $927,360 remains unamortized and is expected to be recognized ratably over the remaining vesting period through February 1, 2028. The intrinsic value of the 329,752 options outstanding as of March 31, 2025, is $0.

 

A summary of activity of the stock options during the three months ended March 31, 2025, is as follows:

 

    Options Outstanding     Weighted Average  
    Number of     Weighted Average     Remaining life  
    Options     Exercise Price     (years)  
                   
Outstanding, December 31, 2024     64,752     $ 11.67       3.82  
Granted     265,000       2.57       5.00  
Exercised     -       -       -  
Forfeited/canceled     -       -       -  
Outstanding, March 31, 2025     329,752     $ 4.36       4.59  
                         
Exercisable options, March 31, 2025     35,088     $ 8.01       3.73  

 

Restricted Stock Unit (RSU)

 

On February 1, 2025, the Company granted 265,000 RSUs to employees of the Company, valued at $620,689. RSUs entitle the holder to receive a specified number of shares of the Company’s common stock and RSU issued vest 100% of shares subject to the RSU on the third anniversary date, on February 1, 2028. During the three months ended March 31, 2025, the Company recognized stock compensation expense of $36,511 related to unvested RSUs, which is expected to be recognized ratably over the service period of 2.84 years. These RSUs are not included in shares outstanding.

 

Stock Award

 

During the three months ended March 31, 2025, the Company recorded stock compensation expense of $39,166 for 15,359 vested shares as part of an annual total stock award to be issued of 66,667 shares of Class A Common Stock to board members.