XML 25 R15.htm IDEA: XBRL DOCUMENT v3.25.3
Stockholders’ Equity
 9 Months Ended
Sep. 30, 2025
Equity [Abstract]  
Stockholders’ Equity

Note 6 – Stockholders’ Equity

 

Common Stock

 

As of September 30, 2025, the Company had 975,000,000 shares of Common Stock, $0.001 par value, authorized, of which 47,075,189 shares were issued and outstanding.

 

At-The-Market Offering Agreement

 

On September 14, 2021, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as agent (“H.C. Wainwright”), pursuant to which the Company may offer and sell, from time-to-time, shares of the Company’s Common Stock through H.C. Wainwright, as agent. Initially, the aggregate offering price of shares issuable under the ATM Agreement was $98,767,500, registered pursuant to the Company’s Form S-3 registration statement that became effective in September 2021.

 

On October 4, 2024, a new Form S-3 registration statement became effective, increasing the total amount of securities that may be offered and sold under the base prospectus to $250,000,000.

 

On July 22, 2025, the Company entered into an amendment to its engagement with H.C. Wainwright in connection with a new Form S-3 registration statement filed on July 23, 2025, to register up to $2,000,000,000 of securities for future issuance (the “New Registration Statement”). The New Registration Statement was approved by the Securities and Exchange Commission (“SEC”) and declared effective on August 1, 2025.

 

Pursuant to the July 2025 amendment, H.C. Wainwright will continue to act as the Company’s exclusive sales agent for any at-the-market offerings through November 12, 2027. Under the amended terms, the Company shall pay H.C. Wainwright a commission of up to 3.0%.

 

All other terms and conditions of the original ATM Agreement and prior engagement letters remain in full force and effect.

 

During the nine months ended September 30, 2025, the Company sold a total of 26,394,414 shares of Common Stock under the ATM Agreement for aggregate total gross proceeds of approximately $139,437,000 at an average selling price of $5.28 per share, resulting in net proceeds of approximately $135,161,000 after deducting commissions and other transaction costs.

 

Share Repurchase Program

 

On September 4, 2025, the Company’s Board of Directors (the “Board”) approved a share repurchase program authorizing the Company to repurchase up to $50 million of its common stock over a three-year period. Repurchases may be made from time to time in the open market, in privately negotiated transactions, or otherwise, in such quantities, at such prices, and in such manner as determined by the Company’s Chief Executive Officer consistent with the Board’s authorization. Repurchases will be conducted in compliance with Rule 10b-18 under the Securities Exchange Act of 1934 and applicable state law. The Company has engaged H.C. Wainwright & Co., LLC as the sole broker to implement the program. In addition: (i) no repurchases may occur at a price per share greater than the current fair market value of the Company’s crypto assets and cash divided by its outstanding common shares, as determined in good faith by the CEO; and (ii) repurchases may not occur if the purchase price is less than a 25% discount to any limit orders in any 10b5-1 plan of a named executive officer, or within 20 calendar days of any market-based order under any such plan. The program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended, or discontinued at any time.

 

The Company accounts for share repurchases under the retirement method of accounting. Accordingly, shares repurchased are immediately retired and deemed cancelled, reducing both issued and outstanding shares. In connection with these retirements, the Company reduces Common Stock and Additional Paid-in Capital (“APIC”) based on a pro rata (average per-share) APIC allocation method, with any differences between the repurchase price and the book value of equity retired recorded to APIC – Share Repurchase. If necessary, amounts are recorded to Retained Earnings once APIC – Share Repurchase is exhausted.

 

During the nine months ended September 30, 2025, the Company repurchased and retired 652,020 shares of its common stock for an average purchase price of $4.60. As of September 30, 2025, approximately $47,000,000 remained available for repurchases under the authorization.

 

 

The following table sets forth information regarding purchases of the Company’s common stock during the three months ended September 30, 2025:

 

Period  Total Number of Shares Purchased   Average Price Paid per Share   Total Number of Shares Purchased as Part of Publicly Announced Program   Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program 
July 1 – July 31, 2025 (1)   0    N/A    0   $50,000,000 
August 1 – August 31, 2025 (1)   0    N/A    0   $50,000,000 
September 1 – September 30, 2025 (1)   652,020   $4.60    652,020   $47,000,000 
Total for Quarter Ended September 30, 2025   652,020   $4.60    652,020   $47,000,000 

 

(1)The Company’s share repurchase program commenced on September 4, 2025. No shares were repurchased prior to that date.

 

Share Based Payments

 

Board Compensation

 

The Company issues $12,500 of Common Stock to each independent director at the end of each calendar quarter, subject to continued service. The number of shares is determined based on the closing price of the Company’s Common Stock on the last trading day of the applicable quarter. For the nine months ended September 30, 2025, the Company issued 49,812 shares of Common Stock with a grant date fair value of approximately $113,000 to independent directors.

 

Performance Bonus Payments

 

For the nine months ended September 30, 2025, the Company issued 329,110 shares of Common Stock to officers and employees as part of the payment of accrued bonus compensation for the year ended December 31, 2024. The total fair value of the shares issued was approximately $813,000 based on the Company’s closing stock price on the issuance date. Of the shares issued, 33,731 were returned to net settle the issuance and pay related taxes, resulting in a net share issuance of 295,379 shares of Common Stock.

 

Preferred Stock

 

Series V Preferred Stock

 

The Company previously designated and issued 14,542,803 shares of Series V Preferred Stock (“Series V”) on June 2, 2023 to shareholders of record as of May 12, 2023. The Series V: (i) is non-convertible (subject to potential conversion rights, as described below), (ii) has a 20% liquidation preference over the shares of Common Stock, (iii) is non-voting, and (iv) has certain rights to dividends and distributions (at the discretion of the Board).

 

At the Company’s 2024 Annual Meeting on September 6, 2024, stockholders approved an amendment to the Series V Certificate of Designation granting the Board the discretion to convert each share of Series V into one share of Common Stock. As of September 30, 2025, the Board has not filed the amendment or elected to convert any Series V shares.

 

Restricted Series V Issuances and Activity

 

On January 13, 2025, the Company issued 1,020,834 restricted shares of Series V Preferred Stock concurrently with the acceleration and settlement of previously outstanding long-term incentive (“LTI”) restricted stock units (“RSUs”). These restricted Series V shares were issued in the same proportion as restricted Common shares to preserve dividend equivalency under the LTI plan and remain subject to the original market capitalization-based performance conditions and time-based vesting schedules ranging from one to three years.

 

On August 7 and August 15, 2025, the Company determined that the market capitalization vesting thresholds of $100 million and $150 million, respectively, had been achieved and sustained for 30 consecutive days. In connection with these milestones—consistent with the vesting of related restricted Common shares—413,888 restricted Series V shares became fully vested and were reclassified from restricted to outstanding Series V Preferred Stock.

 

On February 3, 2025, following the resignation of the Company’s Chief Technology Officer, 49,327 restricted Series V shares were forfeited in tandem with the forfeiture of related restricted Common shares. On August 18, 2025, 333,333 restricted Series V shares were similarly forfeited upon the transition of the Company’s Chief Operating Officer to Operations Specialist. All forfeited shares were returned to the Company and are no longer outstanding.

 

As of September 30, 2025, a total of 322,580 restricted shares of Series V Preferred Stock were issued and outstanding, of which 93,413 shares remain subject solely to time-based vesting conditions, which extend over a one- to three-year period, with full vesting expected by December 31, 2027.

 

 

2021 Equity Incentive Plan

 

The Company’s 2021 Equity Incentive Plan (the “2021 Plan”) was effective on January 1, 2021 and approved by shareholders on September 30, 2021 and amended on June 13, 2022. The Company received shareholder approval on July 11, 2023 to increase the authorized amount under the 2021 Plan from 7,000,000 shares to 12,000,000 shares.

 

Options

 

Performance Incentive Plan Milestone Achievement

 

On August 7, 2025, upon the recommendation of the Compensation Committee, the Board determined that it had exceeded the highest level tier for the liquidity milestone under its 2025 Annual Performance Incentive Plan.

 

Specifically, the Company maintained a cash and crypto balance in excess of $75 million for twenty consecutive days, thereby satisfying the highest tier (cutoff level being $75 million) of the liquidity milestone. This liquidity milestone accounts for 25% of each executive officer’s target incentive compensation and is designed to reward financial strength and liquidity.

 

In accordance with the plan and consistent with the Company’s pay-for-performance philosophy, the Board approved the payment of this performance-based award to all eligible employees in the form of non-qualified stock options under the 2021 Plan., resulting in the grant of 330,985 options. These options: (i) have a term of seven years, (ii) have an exercise price equal to $4.20 per share, (iii) vest in full on December 31, 2026, and (iv) are subject to the terms and conditions set forth in the applicable award agreements.

 

Option Exercises

 

During the nine months ended September 30, 2025, option holders exercised 1,100,000 stock options on a cashless basis, surrendering 353,637 options to cover the exercise price and receiving 746,363 net shares. No cash proceeds were received in connection with these exercises.

 

Options Activity Summary

 

A summary of stock option activity under the Company’s 2021 Equity Incentive Plan for the nine months ended September 30, 2025 and 2024 is presented below:

   

  

Number

of

Shares

   Weighted Average Exercise Price   Total Intrinsic Value   Weighted Average Remaining Contractual Life (in years) 
Options outstanding as of December 31, 2024   1,302,500   $1.96   $804,300    1.7 
Employee options granted   1,808,053    2.75    208,521    6.4 
Employee options exercised   (1,100,000)   1.90    -    - 
Employee options expired   (68,158)   2.47    -    - 
Employee options forfeited   (50,000)   1.40    -    - 
Options outstanding as of September 30, 2025   1,892,395   $2.75   $475,750    3.8 
Options vested and exercisable as of September 30, 2025   1,325,160   $2.53   $372,913    3.8 

 

  

Number

of

Shares

   Weighted Average Exercise Price   Total Intrinsic Value   Weighted Average Remaining Contractual Life (in years) 
Options outstanding as of December 31, 2023   1,200,000   $2.12   $8,700    2.4 
Employee options granted   120,000    1.52    -    4.6 
Employee options expired   (17,500)   10.30    -    - 
Options outstanding as of September 30, 2024   1,302,500   $1.96   $1,650    1.9 
Options vested and exercisable as of September 30, 2024   1,127,500   $2.03   $-    1.5 

 

The following weighted-average assumptions were used to estimate the fair value of options granted during the nine months ended September 30, 2025 and 2024, using the Black-Scholes option pricing model:

   

   For the Nine Months Ended September 30, 
   2025   2024 
Exercise price  $2.70   $1.55 
Term (years)   6.75    5.00 
Expected stock price volatility   116.94%   144.57%
Risk-free rate of interest   4.10%   4.31%

 

These assumptions are consistent with the methods described in Note 3 – Summary of Significant Accounting Policies.

 

 

Restricted Stock Units (RSUs)

 

Long-Term Incentive Plan (LTI) RSUs

 

On January 1, 2025, the Board approved the grant of 150,000 RSUs under the Company’s Long-Term Incentive Plan (“LTI”) to a non-officer employee. These RSUs are subject to both market capitalization and time-based vesting conditions.

 

The RSUs vest in three equal tranches of 50,000 RSUs each, based on the Company achieving and sustaining specific market capitalization thresholds for 30 consecutive days on or before December 31, 2026, as follows:

    

Market Cap Vesting Thresholds

$ 100

million

 

$ 150

million

  

$ 300

million

 
50,000   50,000    50,000 

 

Any RSUs for which the market capitalization condition is not met by December 31, 2026, will be forfeited and automatically terminate without consideration.

 

For any tranche in which the market capitalization condition is achieved, the RSUs remain subject to a time-based vesting schedule, with 20% of the eligible RSUs in such tranche vesting annually over five years, with the first vesting date occurring on December 31, 2025 and subsequent vesting dates occurring on December 31 of each year through 2029, provided that the grantee remains in continuous service with the Company through each applicable vesting date.

 

The fair value of these market-based RSUs was determined using a Monte Carlo simulation and totaled approximately $181,000 as of the grant date. The following assumptions were used to determine fair value as of the grant date, January 1, 2025:

  

   January 1, 2025 
Vesting Hurdle Price   $ 5.26 - $15.79 
Term (years)   2.00 
Expected stock price volatility   92.70%
Risk-free rate of interest   4.25%

 

The Company will recognize compensation expense for these RSUs over the requisite service period, subject to acceleration upon meeting the market capitalization criteria.

 

Accelerated Vesting of RSUs and Conversion to Restricted Common Stock

 

On January 13, 2025, the Company accelerated the vesting of all previously outstanding long-term incentive (“LTI”) restricted stock units (“RSUs”), totaling 1,170,834 RSUs granted to executive officers and employees. These RSUs were settled through the issuance of restricted shares of Common Stock. Because a portion of these RSUs were entitled to the previously declared Series V preferred stock dividend, 1,020,834 restricted shares of Series V were concurrently issued, in the same proportion as the related restricted Common shares, to maintain dividend equivalency under the original RSU terms.

 

The restricted shares of Common Stock and Series V preferred stock issued upon acceleration remain subject to the original market capitalization-based performance conditions and applicable time-based vesting schedules, which range from one to five years.

 

Vesting of Certain Long-Term Incentives

 

On August 7, 2025, the Company determined that the market capitalization vesting condition for certain previously granted Long-Term Incentive (“LTI”) awards had been satisfied. Under the applicable award agreements, vesting required the Company to maintain a market capitalization in excess of $100 million for 30 consecutive days.

 

Additionally, on August 15, 2025, the Company determined that the market capitalization vesting condition for certain previously granted Long-Term Incentive (“LTI”) awards had been satisfied. Under the applicable award agreements, vesting required the Company to maintain a market capitalization in excess of $150 million for 30 consecutive days.

 

As a result, 413,888 shares of Common Stock and 413,888 shares of Series V Preferred Stock, originally issued on January 13, 2025, upon conversion of vested RSUs into restricted equity, became fully vested in accordance with their terms. These shares, previously classified as restricted Common Stock and restricted Series V Preferred Stock, were reclassified to outstanding Common Stock and Series V Preferred Stock, respectively.

 

Forfeitures of LTI RSUs and Restricted Shares of Common Stock

 

On February 3, 2025, upon the voluntary resignation of the Company’s Chief Technology Officer, 120,137 unvested LTI RSUs and 129,327 restricted shares of Common Stock were forfeited in accordance with the terms of the applicable award agreements.

 

On August 18, 2025, upon the transition of the Company’s Chief Operating Officer to the role of Operations Specialist, 333,333 restricted shares of Common Stock were forfeited in accordance with the terms of the applicable award agreements.

 

In accordance with ASC 718, Compensation—Stock Compensation, the Company reversed approximately $812,000 of previously recognized stock-based compensation expense during the nine months ended September 30, 2025. No further expense will be recognized for these forfeited awards.

 

 

RSU Activity Summary

 

The following table summarizes RSU activity under the 2021 Plan for the nine months ended September 30, 2025:

   

   Number of
Restricted
Stock Units		   Weighted
Average Grant
Date Fair Value		 
Nonvested as of December 31, 2024   1,140,971   $3.27 
Granted   150,000    2.47 
Vested   -    - 
Vested and converted to restricted common shares   (1,170,834)   3.05 
Forfeited   (120,137)   4.37 
Nonvested as of September 30, 2025   -   $- 

 

Restricted Shares of Common Stock Activity Summary

 

The following table summarizes restricted Common Stock activity under the 2021 Plan for the nine months ended September 30, 2025:

   

  

Number of

Restricted Shares

of Common Stock

 
Outstanding and nonvested as of December 31, 2024   270,794 
Converted from restricted stock units   1,170,834 
Vested   (413,888)
Forfeited   (462,660)
Outstanding and nonvested as of September 30, 2025   565,080 

 

As of September 30, 2025, a total of 565,080 restricted shares of Common Stock were issued and outstanding, of which 285,913 shares remain subject solely to time-based vesting conditions, which extend over a one- to three-year period, with full vesting expected by December 31, 2027.

 

Stock-based Compensation

 

Stock-based compensation expenses are allocated among general and administrative expenses, compensation expenses and cost of revenues. Stock-based compensation expense for the nine months ended September 30, 2025 and 2024 was as follows:

   

             
   For the Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2025   2024   2025   2024 
Employee stock option awards  $180,697   $34,601   $291,432   $66,594 
Employee restricted stock awards   337,326    244,409    642,930    725,307 
Forfeiture of employee restricted stock unit and share awards   (549,840)   -    (811,898)   - 
Employee share-based salary payments   -    

75,468

    

-

    

75,468

 
Non-employee restricted stock awards   37,500    66,929    112,504    127,509 
Total stock-based compensation  $5,683   $421,407   $234,968   $994,878 

 

Stock Purchase Warrants

 

Warrant Exercises

 

During the nine months ended September 30, 2025, holders exercised 1,369,725 warrants on a cashless basis, surrendering 554,401 warrants and receiving 815,324 net shares. No cash proceeds were received in connection with these exercises.

 

Warrant Activity Summary

 

The following is a summary of warrant activity for the three months ended September 30, 2025:

   

  

Number of

Warrants

 
Outstanding as of December 31, 2024   712,500 
Issuance of warrants in connection with convertible note   2,781,291 
Exercised   (1,369,725)
Outstanding as of September 30, 2025   2,124,066 

 

As of September 30, 2025, 712,500 warrants were classified as derivative liabilities, and 1,411,566 warrants issued in connection with the convertible notes were classified as equity.