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STOCK-BASED COMPENSATION | 3 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2023 Equity Incentive Plan The Company's 2023 Equity Incentive Plan (the “2023 Plan”) permits the grant of incentive stock options, nonstatutory stock options, stock appreciation rights (“SARs”), restricted stock, RSUs and stock bonus awards (all such types of awards, collectively, “stock awards”). Subject to adjustments as set forth in the 2023 Plan, the maximum aggregate number of shares of common stock that may be issued under the 2023 Plan will not exceed 7,487,029 shares. As of March 31, 2025, there were approximately 1,375,196 shares available to be issued, including forfeited shares from predecessor plans. The shares may be authorized, but unissued, or reacquired common stock. Furthermore, subject to adjustments as set forth in the 2023 Plan, in no event shall the maximum aggregate number of shares that may be issued under the 2023 Plan pursuant to Incentive Stock Options exceed the number set forth above plus, to the extent allowable under Section 422 of the Internal Revenue Code and the regulations promulgated thereunder, any shares that again become available for issuance pursuant to the 2023 Plan. The number of shares available for issuance under the 2023 Plan may, at the discretion of our Board or a committee thereof, which committee will be constituted to satisfy applicable laws ("Plan Administrator"), be increased on October 1st of each fiscal year beginning with the 2023 fiscal year until the 2023 Plan terminates, in each case, in an amount equal to the lesser of (i) at the discretion of our Board, 4% of the shares of common stock issued and outstanding on the last day of the immediately preceding month on a fully-diluted and as-converted basis and (ii) such other number of shares determined by our Board. To the extent stock awards or awards or shares issued under the 2021 Plan that were assumed by the Company upon the closing of the Merger (“Existing Plan Awards”) are exercised in full or are surrendered pursuant to an exchange program (as defined in the 2023 Plan), the unissued shares that were subject thereto shall continue to be available under the 2023 Plan for issuance pursuant to future stock awards. In addition, any shares which are retained by us upon exercise of a stock award or Existing Plan Award in order to satisfy the exercise or purchase price for such stock award or Existing Plan Award or any withholding taxes due with respect to such stock award or Existing Plan Award shall be treated as not issued and shall continue to be available under the 2023 Plan for issuance pursuant to future stock awards. Shares issued under the 2023 Plan or an Existing Plan Award and later forfeited to us due to the failure to vest or repurchased by us at the original purchase price paid to us for the shares (including without limitation upon forfeiture to or repurchase by us in connection with a participant ceasing to be a service provider) shall again be available for future grant under the 2023 Plan. To the extent a stock award under the 2023 Plan or Existing Plan Award is paid out in cash rather than shares, such cash payment will not result in reducing the number of shares available for issuance under the 2023 Plan. 2021 Stock Plan Serve's 2021 Stock Plan (the “2021 Plan”) provides for the grant of shares of stock options, SARs and restricted common shares to employees, non-employee directors, and non-employee consultants. The option exercise price generally may not be less than the underlying stock's fair market value at the date of the grant and generally have a term of ten years. The amount granted each calendar year to an employee or non-employee is limited depending on the type of award. Stock options granted under the 2021 Plan typically vest over a four-year period, with a one-year cliff as well as via specified milestones. A summary of information related to stock options for the three months ended March 31, 2025 is as follows:
| Options |  | Weighted Average Exercise Price |  | Intrinsic Value
Outstanding as of December 31, 2024 | 1,022,291 |  | $ | 0.94 |  |  | $ | 12,842,790 |
Granted | 5,000 |  | 14.31 |  |  |
Exercised | (60,120) |  | 0.54 |  |  | $ | 345,690 |
Forfeited | (29,040) |  | 3.73 |  |  |
Outstanding as of March 31, 2025 | 938,131 |  | $ | 0.96 |  |  | $ | 5,394,253 |
Exercisable as of March 31, 2025 | 587,046 |  | $ | 1.09 |  |  | $ | 3,375,515 |
Exercisable and expected to vest at March 31, 2025 | 938,131 |  | $ | 0.96 |  |  | $ | 5,394,253 |
As of March 31, 2025, the weighted average duration to expiration of outstanding options was 7.55 years. Stock-based compensation expense for stock options of $38,210 and $29,266 was recognized for the three months ended March 31, 2025 and 2024, respectively. Total unrecognized compensation cost related to non-vested stock option awards amounted to approximately $213,374 as of March 31, 2025, which will be recognized over a weighted average period of 1.48 years. Classification Stock-based compensation expense for stock options and restricted common stock and restricted stock units (Note 6) was classified in the statements of operations as follows:
| Three Months Ended March 31,
| 2025 |  | 2024
General and administrative | $ | 1,824,199 |  |  | $ | 6,596 |
Operations | 80,496 |  |  | 6,511 |
Research and development | 1,928,181 |  |  | 4,239,748 |
Sales and marketing | 46,491 |  |  | 2,577 |
| $ | 3,879,367 |  |  | $ | 4,255,432 |

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