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STOCKHOLDERS’ (DEFICIT) EQUITY | 12 Months Ended
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Dec. 31, 2024
Equity [Abstract] |
STOCKHOLDERS’ (DEFICIT) EQUITY | NOTE 8 – STOCKHOLDERS’ (DEFICIT) EQUITY The Company has authorized the issuance of up to 100,000,000 shares of common stock, $0.01 par value, and 5,000,000 shares of preferred stock, $0.0001 par value, of which 5,000 shares are designated as Series B Convertible Preferred Stock, 1,610,000 are designated as Series A Preferred Stock and 3,385,000 shares of preferred stock remain undesignated. The Company entered into the ATM Sales Agreement whereby the Company may offer and sell, from time to time, shares of common stock. On June 7, 2024, the Company filed the 2024 Shelf. Under the 2024 Shelf at the time of effectiveness, the Company had the ability to raise up to $150.0 million by selling common stock, preferred stock, debt securities, warrants, and units including $53.3 million of its common stock under the ATM Sales Agreement. As of December 31, 2024, the Company had $53.3 million available under the ATM Sales Agreement, which is part of the $150.0 million available under the 2024 Shelf. Series A Preferred Stock In September 2021, the Company entered into the Preferred Underwriting Agreement with B.Riley. Pursuant to the Preferred Underwriting Agreement, the Company agreed to sell 1,400,000 shares of its Series A Preferred Stock under the Preferred Stock Offering. The Series A Preferred Stock ranks senior to the Company’s common stock with respect to the payment of dividends and liquidation rights. The Company will pay cumulative distributions on the Series A Preferred Stock, from the date of original issuance, in the amount of $2.21875 per share each year, which is equivalent to 8.875% of the $25.00 liquidation preference per share. Dividends on the Series A Preferred Stock will be payable quarterly in arrears, on or about the 15th day of January, April, July and October of each year. The first dividend on the Series A Preferred Stock sold in this offering was declared on December 23, 2021 to holders of record as of January 4, 2022 and was paid on January 14, 2022. Dividends declared and paid on the Series A Preferred Stock during the year ended December 31, 2024 are as follows: (1) quarterly dividend declared on March 26, 2024 to holders of record as of April 5, 2024, which was paid on April 15, 2024, (2) quarterly dividend declared on June 25, 2024 to holders of record as of July 5, 2024 which was paid on July 15, 2024, (3) quarterly dividend declared on September 24, 2024 to holders of record as of October 4, 2024 which was paid on October 15, 2024, and (4) quarterly dividend declared on December 24, 2024 to holders of record as of January 3, 2025 and was paid on January 15, 2025. Dividends declared and paid on the Series A Preferred Stock during the year ended December 31, 2023 are as follows: (1) quarterly dividend declared on March 28, 2023 to holders of record as of April 7, 2023 and was paid on April 17, 2023, (2) quarterly dividend declared on June 27, 2023 to holders of record as of July 7, 2023 and was paid on July 17, 2023, (3) quarterly dividend declared on September 26, 2023 to holders of record as of October 6, 2023 and was paid on October 16, 2023 and (4) quarterly dividend declared on December 26, 2023 to holders of record as of January 5, 2024 and was paid on January 15, 2024. Holders of the Series A Preferred Stock have no voting rights except in the case of certain dividend nonpayments. If dividends on the Series A Preferred Stock are in arrears, whether or not declared, for six or more quarterly periods, whether or not these quarterly periods are consecutive, holders of Series A Preferred Stock and holders of all other classes or series of parity preferred stock with which the holders of Series A Preferred Stock are entitled to vote together as a single class will be entitled to vote, at a special meeting called by the holders of record of at least 10% of any series of preferred stock as to which dividends are so in arrears or at the next annual meeting of stockholders, for the election of two additional directors to serve on our Board until all dividend arrearages have been paid. If and when all accumulated dividends on the Series A Preferred Stock for all past dividend periods shall have been paid in full, holders of shares of Series A Preferred Stock shall be divested of the voting rights set forth above. The Series A Preferred Stock is perpetual and has no maturity date. No outstanding shares of Series A Preferred Stock have been redeemed. However, the Series A Preferred Stock will be redeemable at our option, in whole or in part, at the following redemption prices, plus any accrued and unpaid dividends up to, but not including, the date of redemption: 1) on and after October 15, 2022 and prior to October 15, 2023, at a redemption price equal to $25.75 per share, 2) on and after October 15, 2023 and prior to October 15, 2024, at a redemption price equal to $25.50 per share, 3) on and after October 15, 2024 and prior to and prior to October 15, 2025 at a redemption price equal to $25.25 per share and 4) on and after October 15, 2025 at a redemption price equal to $25.00 per share. In addition, upon the occurrence of a delisting event or change of control, we may, subject to certain conditions, at our option, redeem the Series A Preferred Stock, in whole or in part within 90 days after the first date on which such delisting event occurred or within 120 days after the first date on which such change of control occurred, as applicable, by paying $25.00 per share, plus any accumulated and unpaid dividends up to, but not including, the redemption date. Upon the occurrence of a delisting event or a change of control, each holder of Series A Preferred Stock will have the right unless we have provided or provide notice of our election to redeem the Series A Preferred Stock, to convert some or all of the shares of Series A Preferred Stock held by such holder into a number of shares of our common stock (or equivalent value of alternative consideration) per share of Series A Preferred Stock, or the “Common Stock Conversion Consideration”. In the case of a delisting event or change of control, pursuant to which shares of common stock shall be converted into cash, securities or other property or assets (the “Alternative Form Consideration”), a holder of shares of Series A Preferred Stock shall receive upon conversion of such shares of Series A Preferred Stock the kind and amount of Alternative Form Consideration which such holder would have owned or been entitled to receive upon the delisting event or change of control, had such holder held a number of shares of common stock equal to the Common Stock Conversion Consideration immediately prior to the effective time of the delisting event or change of control. Series B Convertible Preferred Stock On August 27, 2020, the Secretary of State of the State of Delaware delivered confirmation of the effective filing of the Company’s Certificate of Designations of the Series B Convertible Preferred Stock, which established 5,000 shares of the Company’s Series B Preferred Stock, having such designations, rights and preferences as set forth therein (the “Series B Designations”). The holders of Series B Preferred Stock rank senior to the Common Stock with respect to payment of dividends and rights upon liquidation and will vote together with the holders of the Common Stock on an as-converted basis, subject to beneficial ownership limitations, on each matter submitted to a vote of holders of Common Stock (whether at a meeting of stockholders or by written consent). In addition, as further described in the Series B Designations, if at least 30% of the number of shares of Series B Preferred Stock are outstanding, the Company will not take certain corporate actions without the affirmative vote at a meeting (or the written consent with or without a meeting) of the purchasers holding a majority of the shares of Series B Preferred Stock then outstanding. Options and Warrants During the year ended December 31, 2024, the Company issued an aggregate of 512,777 shares of common stock related to the cashless exercise of options. During the year ended December 31, 2024, the Company issued an aggregate of 1,630,458 shares of common stock related to the cashless exercise of warrants. During the year ended December 31, 2024, the Company issued an aggregate of 86,250 shares of common stock related to the exercise of options for total proceeds of approximately $120 thousand. During the year ended December 31, 2023, the Company issued an aggregate of 74,372 shares of common stock related to the cashless exercise of options. During the year ended December 31, 2023, the Company issued an aggregate of 37,500 shares of common stock related to the exercise of options for total proceeds of $94,500. During the year ended December 31, 2023, the Company issued an aggregate of 79,330 shares of common stock related to the cashless exercise of warrants. Common Stock Common Stock Transactions During the Year Ended December 31, 2024 During the year ended December 31, 2024, the Company issued an aggregate of 1,609,960 shares of common stock for service, including vested restricted stock. On February 4, 2023, the Company entered into the Cleared First Amendment between the Company and the sellers of Cleared. The Cleared Stock Purchase Agreement was amended to, among other things change the timing of the payment of the purchase price to $460 thousand paid at closing (which has already been paid by the Company), with the remaining amount to be paid in five quarterly installments beginning on or before February 6, 2023 and ending January 15, 2024. The Company issued the following shares of common stock to the sellers of Cleared under the Cleared First Amendment: (1) 337,895 shares on February 6, 2023, (2) 455,319 shares on April 17, 2023, (3) 158,129 shares on July 17, 2023, (4) 117,583 shares on October 17, 2023 and (5) 95,821 shares on January 16, 2024. The fair value of the stock issuance under the Cleared First Amendment during the year ended December 31, 2024 was $642 thousand. Common Stock Transactions During the Year Ended December 31, 2023 During the year ended December 31, 2023, the Company issued an aggregate of 978,500 shares of common stock for service, including vested restricted stock. On February 4, 2023, the Company entered into the Cleared First Amendment between the Company and the sellers of Cleared. The Cleared Stock Purchase Agreement was amended to, among other things change the timing of the payment of the purchase price to $460 thousand paid at closing (which has already been paid by the Company), with the remaining amount to be paid in five quarterly installments beginning on or before February 6, 2023 and ending January 15, 2024. The Company issued the following shares of common stock to the sellers of Cleared under the Cleared First Amendment during the year ended December 31, 2023: (1) 337,895 shares on February 6, 2023, (2) 455,319 shares on April 17, 2023, (3) 158,129 shares on July 17, 2023 and (4) 117,583 shares on October 17, 2023. The fair value of the stock issuances under the Cleared First Amendment during the year ended December 31, 2023 was $2.6 million. During the year ended December 31, 2023, the Company sold 1,009,907 shares of common stock under the ATM Sales Agreement and net proceeds received were $6.2 million. During the year ended December 31, 2023, the Company issued 100,000 shares of common stock related to the settlement of the Harborside Advisors LLC v. LifeMD, Inc., Case No. 21-cv-10593, and the Specialty Medical Drugstore, LLC D/B/A GoGoMeds v. LifeMD, Inc., Case No. 21-cv-10599, matters. The shares issued were valued based on the closing price of the Company’s stock, or $5.32, on the date of settlement, July 10, 2023. On July 10, 2023, and August 14, 2023, PA001 Holdings, the holder of the Company’s Series B Preferred Stock, elected to convert 2,275 and 1,225 shares, respectively, of the Company’s Series B Preferred Stock into common stock, at a price of $3.25 per share of Series B Preferred Stock, pursuant to the terms of the PA001 Securities Purchase Agreement. The conversion was calculated based on the original issuance price of the Series B Preferred Stock plus all accrued dividends to date or approximately $5.1 million. The conversion resulted in 1,010,170 and 550,694 shares of the Company’s common stock issued to PA001 Holdings, on July 12, 2023 and August 15, 2023, respectively. On March 21, 2023, in connection with the Company’s closing of the Avenue Credit Agreement, the Company issued Avenue Warrants to purchase $1.2 million of the Company’s common stock at an exercise price of $1.24, subject to adjustments. In addition, Avenue may convert up to $2 million of the $15 million in term loans funded at closing into shares of the Company’s common stock at any time while the loans are outstanding, at a price per share equal to $1.49. On November 15, 2023, Avenue converted $1 million of the principal amount of the outstanding term loans into shares of the Company’s common stock. This resulted in 672,042 shares of common stock issued to Avenue. Additionally on November 15, 2023, Avenue exercised 96,773 of the Avenue Warrants on a cashless basis, resulting in 79,330 shares of the Company’s common stock issued. On December 11, 2023, in connection with the Medifast Collaboration, the Company entered into a stock purchase agreement with Medifast’s wholly-owned subsidiary, Jason Pharmaceuticals, Inc., whereby the Company issued 1,224,425 shares of its common stock, in a private placement at a purchase price of $8.1671 per share, for aggregate proceeds of approximately $10 million. WorkSimpli Software Restructuring Transaction (“WSS Restructuring”) Effective January 22, 2021 (the “WSS Effective Date”), the Company consummated the WSS Restructuring. To effect the WSS Restructuring, the Company’s wholly-owned subsidiary at the time, Conversion Labs PR (or subsequently “LifeMD PR”), entered into a series of membership interest exchange agreements, pursuant to which, Conversion Labs PR exchanged a promissory note, dated May 8, 2019 with an outstanding balance of $376 thousand (the “CVLB PR Note”), issued by WSS in favor of Conversion Labs PR, for 37,531 newly issued membership interests of WSS (the “Exchange”). Upon consummation of the Exchange the CVLB PR Note was extinguished. Concurrently, in furtherance of the WSS Restructuring, Conversion Labs PR entered into certain Membership Interest Purchase Agreements whereby Conversion Labs PR purchased membership interests of WSS. Following the consummation of the WSS Restructuring, Conversion Labs PR increased its ownership of WSS from 51% to approximately 85.58% on a fully diluted basis. Additionally, Conversion Labs PR entered into option agreements with Sean Fitzpatrick (the “Fitzpatrick Option Agreement”) and Varun Pathak (the “Pathak Option Agreement” together with Fitzpatrick Option Agreement the “Option Agreements”), pursuant to which Conversion Labs PR granted options to purchase membership interest units of WSS. On September 30, 2022, Sean Fitzpatrick and Varun Pathak exercised their options to purchase 10,300 and 2,100 membership interest units, respectively, of WorkSimpli for an exercise price of $1.00 per membership interest unit under the Option Agreements. WorkSimpli Software Capitalization Update Effective March 31, 2023, the Company redeemed 500 membership interest units in WorkSimpli. Following the retirement, the Company’s ownership interest in WorkSimpli increased to 74.1%. On June 30, 2023, WorkSimpli’s Chief Operating Officer, exercised her option agreement (the “WorkSimpli COO Option Agreement”) to purchase 889 membership interest units of WorkSimpli for an exercise price of $1.00 per membership interest unit. Following the exercise of the WorkSimpli COO Option Agreement, the Company decreased its ownership interest in WorkSimpli from 74.1% to 73.3%. Non-controlling Interest Net income attributed to non-controlling interest amounted to $153 thousand and $2.8 million for the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, the Company paid distributions to non-controlling shareholders of $774 thousand and $144 thousand, respectively. On March 31, 2024, WorkSimpli declared a cash distribution in the amount of $11.20 per membership interest unit to all unit holders of record as of March 31, 2024 and was paid on April 10, 2024. On July 1, 2024, WorkSimpli declared a cash distribution in the amount of $9.05 per membership interest unit to all unit holders of record as of June 30, 2024 and was paid on July 1, 2024. On November 15, 2024, WorkSimpli declared a cash distribution in the amount of $5.66 per membership interest unit to all unit holders of record as of November 1, 2024 and was paid on November 18, 2024. The total of these distributions was $630 thousand and is included in distributions to non-controlling interest within the statement of stockholders’ deficit for the year ended December 31, 2024. On June 30, 2023, WorkSimpli declared a cash distribution in the amount of $22.40 per membership interest unit to all unit holders of record as of June 30, 2023 and was paid on July 3, 2023. On July 31, 2023, WorkSimpli declared a cash distribution in the amount of $11.20 per membership interest unit to all unit holders of record as of July 28, 2023 and was paid on August 1, 2023. On August 31, 2023, WorkSimpli declared a cash distribution in the amount of $16.80 per membership interest unit to all unit holders of record as of August 30, 2023 and was paid on September 1, 2023. On September 30, 2023, WorkSimpli declared a cash distribution in the amount of $14.00 per membership interest unit to all unit holders of record as of September 30, 2023 and was paid on October 5, 2023. On October 31, 2023, WorkSimpli declared a cash distribution in the amount of $11.20 per membership interest unit to all unit holders of record as of October 31, 2023 and was paid on November 8, 2023. On December 31, 2023, WorkSimpli declared a cash distribution in the amount of $13.44 per membership interest unit to all unit holders of record as of January 5, 2024 and was paid on January 5, 2024. The total of these distributions was $2.1 million and is included in within general and administrative expenses for the year ended December 31, 2023. Stock Options 2020 Equity Incentive Plan (the “2020 Plan”) On January 8, 2021, the Company approved the Company’s 2020 Equity and Incentive Plan (the “2020 Plan”). Approval of the 2020 Plan was included as Proposal 1 in the Company’s definitive proxy statement for its Special Meeting of Stockholders filed with the Securities and Exchange Commission on December 7, 2020. The 2020 Plan is administered by the Compensation Committee of the Board of Directors (the “Board”) and initially provided for the issuance of up to 1,500,000 shares of Common Stock. The number of shares of Common Stock available for issuance under the 2020 Plan automatically increases by 150,000 shares of Common Stock on January 1st of each year, for a period of not more than ten years, commencing on January 1, 2021 and ending on (and including) January 1, 2030. Awards under the 2020 Plan can be granted in the form of stock options, non-qualified and incentive options, stock appreciation rights, restricted stock, and restricted stock units. On June 24, 2021, at the Annual Meeting of Stockholders, the stockholders of the Company approved the amendment to the 2020 Plan to increase the maximum number of shares of the Company’s common stock available for issuance under the 2020 Plan by 1,500,000 shares. On June 16, 2022, at the Annual Meeting of Stockholders, the stockholders of the Company approved the second amendment and restatement of the 2020 Plan, which amended the 2020 Plan to increase the maximum number of shares of the Company’s common stock available for issuance under the 2020 Plan by 1,500,000 shares. On June 14, 2024, at the Annual Meeting of Stockholders, the stockholders of the Company approved the third amendment and restatement to the 2020 Plan (the “Amended 2020 Plan”), which further amended the 2020 Plan by increasing the maximum number of shares of the Company’s common stock available for issuance under the Amended 2020 Plan by 3,000,000 shares. As of December 31, 2024, the Amended 2020 Plan provided for the issuance of up to 8,100,000 shares of Common Stock. Remaining authorization under the Amended 2020 Plan was 1,940,844 shares as of December 31, 2024. The forms of award agreements to be used in connection with awards made under the Amended 2020 Plan to the Company’s executive officers and non-employee directors are:
● | Form of Non-Qualified Option Agreement (Non-Employee Director Awards)
● | Form of Non-Qualified Option Agreement (Employee Awards); and
● | Form of Restricted Stock Award Agreement.
Previously, the Company had granted service-based stock options and performance-based stock options separate from the Amended 2020 plan. The following is a summary of outstanding options activity under our Amended 2020 Plan: SCHEDULE OF OPTION ACTIVITY
|  | Options Outstanding Number of Shares |  |  | Exercise Price per Share |  |  | Weighted Average Remaining Contractual Life |  |  | Weighted Average Exercise Price per Share |
Balance, December 31, 2022 |  |  | 1,784,587 |  |  | $ | 2.30 – 21.02 |  |  |  | 6.95 years |  |  | $ | 9.54 |
Granted |  |  | 109,500 |  |  |  | 1.84 – 7.44 |  |  |  | 3.86 years |  |  |  | 3.50 |
Exercised |  |  | (37,500 | ) |  |  | 2.52 |  |  |  | 2.70 years |  |  |  | 2.52 |
Cancelled/Forfeited/Expired |  |  | (1,129,698 | ) |  |  | 2.30 – 21.02 |  |  |  | 6.62 years |  |  |  | 10.12 |
Balance at December 31, 2023 |  |  | 726,889 |  |  | $ | 1.84 – 13.74 |  |  |  | 4.93 years |  |  | $ | 8.08 |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | (172,222 | ) |  |  | 6.00 – 7.50 |  |  |  | 5.86 years |  |  |  | 6.44 |
Cancelled/Forfeited/Expired |  |  | (39,000 | ) |  |  | 7.44 – 13.74 |  |  |  | 5.74 years |  |  |  | 12.77 |
Balance at December 31, 2024 |  |  | 515,667 |  |  | $ | 1.84 – 13.74 |  |  |  | 4.81 years |  |  | $ | 8.28 |
Exercisable at December 31, 2023 |  |  | 604,758 |  |  | $ | 1.84 – 13.74 |  |  |  | 6.23 years |  |  | $ | 8.44 |
Exercisable at December 31, 2024 |  |  | 504,787 |  |  | $ | 1.84 – 13.74 |  |  |  | 4.84 years |  |  | $ | 8.39 |
Total compensation expense under the Amended 2020 Plan options above was $1.2 million and $4.5 million for the years ended December 31, 2024 and 2023, respectively, with unamortized expense remaining of $30 thousand as of December 31, 2024. During the year ended December 31, 2024, 172,222 options were exercised on a cashless basis, which resulted in 62,781 shares issued. As of December 31, 2024, the aggregate intrinsic value of vested service-based options outstanding was $200 thousand. The following is a summary of outstanding service-based options activity (prior to the establishment of the Amended 2020 Plan above): SCHEDULE OF OPTION ACTIVITY
|  | Options Outstanding Number of Shares |  |  | Exercise Price per Share |  |  | Weighted Average Remaining Contractual Life |  |  | Weighted Average Exercise Price per Share |
Balance, December 31, 2022 |  |  | 1,439,333 |  |  | $ | 1.00 – 19.61 |  |  |  | 5.63 years |  |  | $ | 6.11 |
Granted |  |  | 140,000 |  |  |  | 1.00 – 2.00 |  |  |  | 1.94 years |  |  |  | 1.71 |
Exercised |  |  | (120,000 | ) |  |  | 1.00 – 1.50 |  |  |  | 4.34 years |  |  |  | 1.33 |
Cancelled/Forfeited/Expired |  |  | (335,000 | ) |  |  | 1.25 – 19.61 |  |  |  | 3.90 years |  |  |  | 14.09 |
Balance at December 31, 2023 |  |  | 1,124,333 |  |  | $ | 1.00 – 11.98 |  |  |  | 4.60 years |  |  | $ | 3.69 |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | (232,000 | ) |  |  | 1.00 – 6.25 |  |  |  | 2.55 years |  |  |  | 2.19 |
Cancelled/Forfeited/Expired |  |  | (210,000 | ) |  |  | 1.40 – 7.73 |  |  |  | 2.78 years |  |  |  | 2.73 |
Balance at December 31, 2024 |  |  | 682,333 |  |  | $ | 1.00 – 11.98 |  |  |  | 4.24 years |  |  | $ | 4.06 |
Exercisable December 31, 2023 |  |  | 1,090,083 |  |  | $ | 1.00 – 11.98 |  |  |  | 4.62 years |  |  | $ | 3.66 |
Exercisable at December 31, 2024 |  |  | 682,333 |  |  | $ | 1.00 – 11.98 |  |  |  | 4.24 years |  |  | $ | 4.06 |
Total compensation expense under the above service-based option plan was $291 thousand and $1.7 million for the years ended December 31, 2024 and 2023, respectively, with no unamortized expense remaining as of December 31, 2024. Of the total service-based options exercised during the year ended December 31, 2024, 170,750 options were exercised on a cashless basis, which resulted in 134,302 shares issued and 61,250 options were exercised for cash. As of December 31, 2024, aggregate intrinsic value of vested service-based options outstanding was $1.1 million. The following is a summary of outstanding performance-based options activity: SCHEDULE OF OPTION ACTIVITY
|  | Options Outstanding Number of Shares |  |  | Exercise Price per Share |  |  | Weighted Average Remaining Contractual Life |  |  | Weighted Average Exercise Price per Share |
Balance at December 31, 2022 |  |  | 535,000 |  |  | $ | 1.25 – 2.50 |  |  |  | 4.59 years |  |  | $ | 1.60 |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Cancelled/Forfeited/Expired |  |  | (50,000 | ) |  |  | 2.00 |  |  |  | - |  |  |  | 2.00 |
Balance at December 31, 2023 |  |  | 485,000 |  |  | $ | 1.25 – 2.50 |  |  |  | 4.13 years |  |  | $ | 1.56 |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | (395,000 | ) |  |  | 1.50 – 2.00 |  |  |  | 3.31 years |  |  |  | 1.53 |
Cancelled/Forfeited/Expired |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Balance at December 31, 2024 |  |  | 90,000 |  |  | $ | 1.25 – 2.50 |  |  |  | 2.30 years |  |  | $ | 1.69 |
Exercisable December 31, 2023 |  |  | 420,000 |  |  | $ | 1.50 – 2.50 |  |  |  | 4.20 years |  |  | $ | 1.56 |
Exercisable at December 31, 2024 |  |  | 25,000 |  |  | $ | 1.75 – 2.50 |  |  |  | 1.40 years |  |  | $ | 2.05 |
No compensation expense was recognized on the performance-based options above for the years ended December 31, 2024 and 2023. As of December 31, 2024, aggregate intrinsic value of vested performance options outstanding was $73 thousand. Of the total performance-based options exercised during the year ended December 31, 2024, 370,000 options were exercised on a cashless basis, which resulted in 315,694 shares issued and 25,000 options were exercised for cash. RSUs and RSAs (under our Amended 2020 Plan) The following is a summary of outstanding RSUs and RSAs activity under our Amended 2020 Plan: SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY
|  | RSUs and RSAs Outstanding Number of Shares |
Balance at December 31, 2022 |  |  | 1,028,250 |
Granted |  |  | 3,625,750 |
Vested |  |  | (674,625 | )
Forfeited |  |  | (785,000 | )
Balance at December 31, 2023 |  |  | 3,194,375 |
Granted |  |  | 1,759,767 |
Vested |  |  | (1,454,198 | )
Forfeited |  |  | (450,000 | )
Balance at December 31, 2024 |  |  | 3,049,944 |
The total fair value of the 1,759,767 RSUs and RSAs granted was $12.3 million which was determined using the fair value of the quoted market price on the date of grant. Total compensation expense under the above Amended 2020 Plan RSUs and RSAs was $9.9 million and $5.4 million for the years ended December 31, 2024 and 2023, respectively, with unamortized expense remaining of $7.1 million as of December 31, 2024. During the year ended December 31, 2024, 1,454,198 RSUs and RSAs vested, of which 1,359,960 RSUs and RSAs were issued. RSUs and RSAs (outside of our Amended 2020 Plan) The following is a summary of outstanding RSUs and RSAs activity (outside of our Amended 2020 Plan): SCHEDULE OF RESTRICTED STOCK UNIT ACTIVITY
|  | RSUs and RSAs Outstanding Number of Shares |
Balance at December 31, 2022 |  |  | 715,000 |
Granted |  |  | 725,000 |
Vested |  |  | (390,000 | )
Cancelled/Forfeited |  |  | (500,000 | )
Balance at December 31, 2023 |  |  | 550,000 |
Granted |  |  | - |
Vested |  |  | (250,000 | )
Balance at December 31, 2024 |  |  | 300,000 |
Total compensation expense for RSUs and RSAs outside of the Amended 2020 Plan was $809 thousand and $885 thousand for the years ended December 31, 2024 and 2023, respectively, with no unamortized expense remaining as of December 31, 2024. During the year ended December 31, 2024, 250,000 RSUs and RSAs vested, of which 250,000 RSUs and RSAs were issued. Warrants The following is a summary of outstanding and exercisable warrant activity: SCHEDULE OF WARRANT OUTSTANDING AND EXERCISABLE
|  | Warrants Outstanding Number of Shares |  |  | Exercise Price per Share |  |  | Weighted Average Remaining Contractual Life |  |  | Weighted Average Exercise Price per Share |
Balance at December 31, 2022 |  |  | 3,859,638 |  |  | $ | 1.40 – 12.00 |  |  |  | 4.89 years |  |  | $ | 5.60 |
Granted |  |  | 967,742 |  |  |  | 1.24 |  |  |  | 4.22 years |  |  |  | 1.24 |
Exercised |  |  | (96,773 | ) |  |  | 1.24 |  |  |  | 4.22 years |  |  |  | 1.24 |
Cancelled/Forfeited/Expired |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2023 |  |  | 4,730,607 |  |  | $ | 1.24 – 12.00 |  |  |  | 3.95 years |  |  | $ | 4.81 |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | (2,986,877 | ) |  |  | 1.40 – 5.75 |  |  |  | 3.13 years |  |  |  | 4.90 |
Cancelled/Forfeited/Expired |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Balance at December 31, 2024 |  |  | 1,743,730 |  |  | $ | 1.24 – 12.00 |  |  |  | 2.66 years |  |  | $ | 4.65 |
Exercisable December 31, 2023 |  |  | 4,730,607 |  |  | $ | 1.24 – 12.00 |  |  |  | 3.95 years |  |  | $ | 4.80 |
Exercisable December 31, 2024 |  |  | 1,743,730 |  |  | $ | 1.24 – 12.00 |  |  |  | 2.66 years |  |  | $ | 4.63 |
Total compensation expense for warrants granted prior to the year ended December 31, 2023 was $0 and $18 thousand for the years ended December 31, 2024 and 2023, respectively, with no unamortized expense remaining as of December 31, 2024. No stock-based compensation expense on the warrants granted during the year ended December 31, 2023 was recorded as the warrants are amortized through debt discount (see Note 7). During the year ended December 31, 2024, 2,986,877 warrants were exercised on a cashless basis, which resulted in 1,630,458 shares issued. As of December 31, 2024, aggregate intrinsic value of vested warrants outstanding was $4.1 million. Stock-based Compensation The total stock-based compensation expense related to common stock issued for services, service-based stock options, performance-based stock options, warrants and RSUs, and RSAs amounted to $12.2 million and $12.5 million for the years ended December 31, 2024 and 2023, respectively. Such amounts are included in general and administrative expenses in the consolidated statements of operations. Unamortized expense remaining related to service-based stock options, performance-based stock options, warrants, RSUs, and RSAs was $7.1 million as of December 31, 2024, which is expected to be recognized through 2027.

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