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STOCKHOLDERS EQUITY | 6 Months Ended
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Jun. 30, 2025
STOCKHOLDERS' EQUITY |
STOCKHOLDERS' EQUITY | NOTE 13 – STOCKHOLDERS’ EQUITY Issuance of Common Stock During the six months ended June 30, 2025 and 2024, the Company issued 1,472,097 shares and 791,667 shares, respectively, of its common stock in conjunction with the vesting of restricted stock units (“RSUs”) and exercising of stock options. See the “Share-Based Compensation” section below for further details. Sale of Common Stock During the six months ended June 30, 2025, the Company sold 1,857,923 shares of its common stock in an “at the market offering” and received gross proceeds of $5,158,787 based on a weighted average price of $2.78 per share. Direct issuance costs totaling $94,304 were incurred related to these sales. The Company did not sell any of its common stock during the six months ended June 30, 2024. The Company also issued 2,919,643 shares of its common stock in the first six months of 2025 related to the exercise of pre-existing warrants. See the “Common Stock Warrants” section below for further details. Share-based compensation In December 2023, the shareholders of the Company approved our 2023 Equity Incentive Plan (“the Plan”), which provides for the grant of incentive stock options, non-qualified stock options and other types of awards. The general purpose of the Plan is to provide a means whereby eligible employees, officers, directors and other service providers develop a sense of proprietorship and personal involvement in our development and financial success, and to encourage them to devote their best efforts to our business, thereby advancing our interests and the interests of our shareholders. During the six months ended June 30, 2025, the Company granted stock options and RSUs totaling 757,300 and 654,600, respectively, pursuant to the Plan. Once vested, each stock option and RSU represent the right to receive one share of the Company’s common stock. The maximum number of shares of common stock available for issuance in connection with stock options, RSUs, and other awards granted under the Plan is 8,700,000. Share-based compensation expense for the periods noted was as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Stock options |  | $ | 251,571 |  |  | $ | 47,558 |  |  | $ | 404,083 |  |  | $ | 63,469 |
RSUs |  |  | 335,342 |  |  |  | 47,364 |  |  |  | 428,214 |  |  |  | 237,378 |
Total share-based compensation expense |  | $ | 586,913 |  |  | $ | 94,922 |  |  | $ | 832,297 |  |  | $ | 300,847 |
The following table summarizes the aggregate non-cash stock-based compensation recognized in the Condensed Consolidated Statement of Operations for stock options and RSUs:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
General and administrative |  | $ | 263,385 |  |  | $ | 67,708 |  |  | $ | 331,093 |  |  | $ | 227,777 |
Salaries and benefits |  |  | 319,627 |  |  |  | 27,214 |  |  |  | 493,403 |  |  |  | 73,070 |
Professional fees |  |  | 3,901 |  |  |  | - |  |  |  | 7,801 |  |  |  | - |
Total non-cash share-based compensation expense |  | $ | 586,913 |  |  | $ | 94,922 |  |  | $ | 832,297 |  |  | $ | 300,847 |
Stock options Stock options granted have either a 3-year or 10-year contractual term and are subject to either service or performance-based vesting conditions. The following table summarizes the weighted-average assumptions used to value stock options granted during the six months ended June 30, 2025 using the Black-Scholes method:
Weighted-Average Grant Date Assumptions |  | Six Months Ended June 30, 2025 |
Expected term (in years) |  |  | 8.3 |
Risk-free interest rate |  |  | 4.4 | %
Expected dividend yield |  |  | 0.0 | %
Expected volatility |  |  | 97.0 | %
Fair value per share |  | $ | 1.80 |
Expected term – The expected term represents the period of time that options are expected to be outstanding. As the Company does not have sufficient historical exercise behavior, it uses the contractual term of the option or the simplified method as defined in Staff Accounting Bulletin Topic 14 for the expected term assumption. Risk-free interest rate – The risk-free interest rate is based on the U.S. Treasury rate in effect at the time of the grant with an equivalent term approximating the expected term of the options. Expected dividend yield—The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility – The expected volatility is based on the historical volatility of our stock price over the expected term of the stock option. Activity with respect to stock options is summarized as follows:
|  | Shares |  |  | Weighted-Average Exercise Price Per Share |  |  | Weighted-Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value |
Options outstanding, December 31, 2024 |  |  | 4,330,000 |  |  | $ | 0.23 |  |  |  | 3.7 |  |  | $ | 6,652,700 |
Granted |  |  | 757,300 |  |  |  | 2.08 |  |  |  | - |  |  |  | - |
Exercised |  |  | (622,500 | ) |  |  | 0.23 |  |  |  | - |  |  |  | - |
Forfeited |  |  | (166,667 | ) |  |  | 0.22 |  |  |  | - |  |  |  | - |
Expired |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Options outstanding, June 30, 2025 |  |  | 4,298,133 |  |  | $ | 0.56 |  |  |  | 4.4 |  |  | $ | 7,058,358 |
Nonvested options, June 30, 2025 |  |  | 3,718,966 |  |  | $ | 0.61 |  |  |  | 4.6 |  |  | $ | 5,932,566 |
Vested and exercisable options, June 30, 2025 |  |  | 579,167 |  |  | $ | 0.24 |  |  |  | 3.7 |  |  | $ | 1,125,792 |
At June 30, 2025, total unrecognized share-based compensation expense related to stock options was $1,496,779, which is expected to be recognized over a weighted-average remaining period of 1.9 years. During the six months ended June 30, 2025, 622,500 stock options were exercised to purchase shares of common stock. These exercises included 250,000 options for cash proceeds of $55,000 and cashless exercises where 50,269 shares of common stock were surrendered to the Company to pay for the aggregate exercise price of the stock options and 322,231 shares of common stock were issued. The total intrinsic value of the 622,500 stock options exercised during the six months ended June 30, 2025 was $1,061,033. Restricted stock units Activity with respect to RSUs is summarized as follows:
|  | Shares |  |  | Weighted-Average Grant Date Fair Value Per Share |
RSUs outstanding at December 31, 2024 |  |  | 2,090,000 |  |  | $ | 0.24 |
Granted |  |  | 654,600 |  |  |  | 2.26 |
Vested and issued |  |  | (899,866 | ) |  |  | 0.40 |
Forfeited |  |  | - |  |  |  | - |
RSUs outstanding at June 30, 2025 |  |  | 1,844,734 |  |  |  | 0.88 |
At June 30, 2025, total unrecognized share-based compensation expense related to RSUs was $1,382,688, which is expected to be recognized over a weighted-average remaining period of 2.1 years. The weighted-average remaining contractual term of the nonvested RSU shares was 1.4 years at June 30, 2025. Common stock warrants During the first six months of 2025, the Company issued 2,919,643 shares of common stock related to the exercise of pre-existing warrants and received gross proceeds of $2,225,411, based on a weighted average exercise price of $0.76 per share. No warrants were issued or expired during the six months ended June 30, 2025 and 2024 nor were any warrants exercised during the six months ended June 30, 2024. Following is a summary of the Company’s warrant activity during the six months ended June 30, 2025:
|  | Number of Warrants |  |  | Weighted Average Exercise Price |
Balance at December 31, 2024 |  |  | 10,142,215 |  |  | $ | 0.77 |
Exercised |  |  | (2,919,643 | ) |  |  | 0.76 |
Balance at June 30, 2025 |  |  | 7,222,572 |  |  | $ | 0.77 |
Each warrant represents the right to receive one share of the Company’s common stock. The composition of the Company’s warrants outstanding at June 30, 2025 was as follows:
Number of warrants |  |  | Exercise Price |  |  | Expiration Date |  | Remaining life (years) |
| 1,428,572 |  |  | $ | 0.46 |  |  | 1/27/2026 |  |  | 0.58 |
| 4,987,500 |  |  | $ | 0.85 |  |  | 8/3/2026 |  |  | 1.09 |
| 806,500 |  |  | $ | 0.85 |  |  | 2/1/2026 |  |  | 0.59 |
| 7,222,572 |  |  |  |  |  |  |  |  |  |  |
All outstanding warrants of the Company expire on or before August 3, 2026.

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