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STOCKHOLDERS EQUITY
 6 Months Ended
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.