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STOCKHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 10 STOCKHOLDERS’ EQUITY

 

(A) Common Stock

 

The Company issued the following common stock during the three months ended March 31, 2024, and 2023:

 

Transaction Type  Shares Issued   Valuation $  

Range of Value

Per Share $

March 31, 2024 Equity Transactions             
Common stock issued, pursuant to services provided   890,103    3,295,029   1.27-1.68
Issuance of common stock pursuant to offering, net   2,733,361    3,655,755   1.25-1.64

 

Transaction Type 

Shares

Issued

   Valuation ($)  

Range of Value

Per Share ($)

March 31, 2023 Equity Transactions             
Common stock issued, pursuant to services provided   282,188    2,963,702   2.52 – 3.56

 

As of March 31, 2024, the remaining amount to be used under the ATM offering program is $6.5 million.

 

(B) Preferred Stock

 

The following is a summary of the Company’s Preferred Stock activity during the three months ended March 31, 2023:

 

 

Transaction Type  Quantity   Carrying Value   Value per Share ($) 
Preferred Stock Balance at December 31, 2022   880,400   $220,099   $0.25 
Preferred Stock redemptions   —    —    — 
Preferred Stock Balance at March 31, 2023   880,400   $220,099   $0.25 

 

The Series A Preferred Stock was convertible at the holder’s option. The Company could repurchase shares of the Preferred Stock for $3.50 per share. Holders also had a put option, allowing them to sell their shares of Preferred Stock back to the Company at $0.25 per share, and therefore the stock was classified as mezzanine equity rather than permanent equity.

 

 

There were no shares of Series A Preferred Stock outstanding at March 31, 2024 and the Company terminated its designation of the Series A Preferred Stock in May 2023. The Company has not designated any other preferred stock as of March 31, 2024.

 

(C) Stock Options

 

The following is a summary of the Company’s stock option activity during the three month ended March 31, 2024 and 2023:

 

Options  Shares  

Weighted

Average

Exercise Price

  

Weighted

Average

Remaining

Contractual

Life

(In Years)

  

Aggregate

Intrinsic

Value

 
Outstanding, January 1, 2024   35,805,976   $7.33   ––   $2,037,200 
Exercised   ––    ––    ––    –– 
Granted   540,000    1.63    ––    — 
Forfeited   (189,500)   2.89    —    — 
Expired        —           
Outstanding, March 31, 2024   36,156,476   $7.3    2.58   $2,037,200 
                     
Exercisable, March 31, 2024   13,892,937   $4.54    2.07   $2,034,525 

 

Options  Shares  

Weighted

Average

Exercise Price

  

Weighted

Average

Remaining

Contractual

Life

(In Years)

  

Aggregate

Intrinsic

Value

 
Outstanding, January 1, 2023   33,289,250   $7.7    —   $— 
Exercised             —    — 
                     
Expired   175,000    3.0    —    — 
Outstanding, March 31, 2023   33,114,250   $7.7    3.2   $10,534,567 
                     
Exercisable, March 31, 2023   12,731,250   $4.4    2.55   $10,534,567 

 

The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during three month ended March 31, 2024 and 2023:

 

    March 31, 2024     March 31, 2023  
      Range       Range  
Stock price   $ 1.76     $ 3.74-3.84  
Exercise price   $ 0 - 14     $ 3.0  
Expected life (in years)     2.87 yrs.       5 yrs.  
Volatility     37 %      42 %
Risk-fee interest rate     4.10 %      5.02 %
Dividend yield     —       —  

 

The Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during a term comparable to the expected term of stock option issued. The Company relies on the expected volatility of comparable publicly traded companies within its industry sector, which is deemed more relevant, to compute its expected volatility.

 

Unamortized future option expense was $13.9 million (excluding certain market-based options which management cannot ascertain to have a probable outcome amounting to $63 million) at March 31, 2024 and it is expected to be recognized over a weighted-average period of 2 years.

 

 

(D) Warrants Issued

 

The following is a summary of the Company’s warrant activity during three month ended March 31, 2024 and 2023:

 

  

Number of

Warrants

  

Weighted Average

Exercise Price

 
Balance, January 1, 2024   2,063,522   $5.76 
Issued   —    — 
Exercised   —    — 
Forfeited   (14,375)   — 
Balance, March 31, 2024   2,049,147   $5.45 

 

  

Number of

Warrants

  

Weighted Average

Exercise Price

 
Balance, January 1, 2023   671,855   $11.5 
Issued   1,391,667    3.0 
Exercised   —    — 
Forfeited   —    — 
Balance, March 31, 2023   2,063,522   $5.76 

 

During the three months ended March 31, 2024, the Company did not issued any warrants. During the three months ended March 31, 2023 as an inducement to enter certain financing transactions, the Company issued 1,391,667 3- year warrants to the noteholders at an adjusted exercise price of $2.70 per warrant. The Company recorded a debt discount aggregating $5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet.

 

(D) Restricted stock units

 

A summary of the Company’s non-vested restricted stock units during the three months ended March 31, 2024 and 2023 are as follows:

 

   Shares   Weighted Average Grant Due Fair Value 
Non-vested restricted stock units, January 1, 2024   4,919,702   $4.21 
Granted   600,000    1.76 
Vested   (770,888)   3.79 
Forfeited   (13,834)   1.52 
Non-Vested restricted stock units, March 31, 2024   4,734,980  

$

3.98 
           
Non-vested restricted stock units, January 1, 2023   2,516,461  

$

8.39 
Granted   9,096    3.29 
Vested   (540,188)   10.73 
Forfeited   (5,400)   11.4 
Non-vested restricted stock units on March 31, 2023   1,979,969  

$

7.87 

 

The weighted-average remaining contractual life of the restricted units as of March 31, 2024 is 1.3 years.

 

One RSU gives the right to receive one share of the Company’s common stock. RSUs that vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSU with a market condition. Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over the vesting period.

 

During the three months ended March 31, 2024, and 2023, the Company recognized compensation expense of $ 3,295,029, and $2,963,702, respectively, related to stock options, RSUs and RSAs.