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Share-Based Compensation & Warrants
 9 Months Ended
Sep. 30, 2025
Equity [Abstract]  
Share-Based Compensation & Warrants

Note 8. Share-Based Compensation & Warrants

 

Stock Options & Awards

 

The Company recognizes share-based payments to employees, directors, and consultants in accordance with ASC 718, Compensation – Stock Compensation, which requires that all such awards be measured at fair value on the grant date and recognized as expense over the requisite service period, net of estimated forfeitures.

 

During the nine months ended September 30, 2025, the Company issued and accrued stock-based compensation as follows:

 

● Chief Executive Officer (James Ballengee):
In 2025, the Company issued 160,266 shares of common stock (net of tax withholdings) under the CEO’s employment agreement for services rendered from October 28, 2024 through January 27, 2025. Under the renewed employment agreement, the Company is obligated to issue 688,891 shares of common stock for the employment period from October 28, 2024 through October 27, 2025, in four equal quarterly installments of 172,222 shares each (with a final installment of 172,225 shares). The Company issued 172,222 shares on February 27, 2025, and 172,222 shares on July 30, 2025, in accordance with the agreement. The remaining 344,447 shares are scheduled to be issued in equal quarterly installments during the fourth quarter of 2025 and the first quarter of 2026. (Share counts represent gross shares prior to payroll tax withholdings.)

 

● Former Chief Financial Officer (Tyler Nelson):
Under the CFO’s employment agreement, he was entitled to bonuses at various times and upon certain events, including an annual cash incentive bonus of $225,000 for December 31, 2024, an annual equity incentive bonus of $112,500, and a $100,000 stock bonus related to the close of the acquisition of the Endeavor Entities. These awards totaled $437,500, payable in 462,462 shares of common stock (before payroll tax withholdings). The Company issued 105,213 shares of common stock (after tax withholdings) in February 2025 to satisfy these obligations.

 

● Executive Vice President and Chief Operating Officer (Les Patterson):
Pursuant to Amendment No. 1 to his employment agreement dated February 10, 2025, the Company issued 74,701 shares of common stock valued at $75,000. Under Amendment No. 2, executed August 12, 2025, Mr. Patterson was promoted to Executive Vice President and Chief Operating Officer and received a one-time signing bonus of $250,000 in Company common stock, issued pursuant to the Company’s Form S-8 Registration Statement and priced based on the volume-weighted average trading price for the five NASDAQ trading days preceding the agreement date.

 

● Vice President of Human Resources:
The Vice President of Human Resources is entitled to annual equity compensation of $75,000, payable in equal quarterly installments of Company common stock issued under the 2023 Equity and Incentive Plan.

 

● Board of Directors:
The Company granted quarterly equity awards to independent board members totaling 97,263 shares for the nine months ended September 30, 2025.

 

● Consulting Agreement:
On February 11, 2025, the Company entered into a Consulting Agreement with WSGS, LLC, under which compensation of up to $1.3 million per year is payable in registered shares of common stock under the Company’s 2023 Equity and Incentive Plan. The agreement provides for stock-based compensation to be recognized over the contract term in accordance with ASC 718.

 

Total stock-based compensation expense recognized for the nine months ending September 30, 2025, was $1,114,916 related to employee awards, $114,424 related to director awards, and $1,206,000 related to consulting agreements.

 

The following table summarizes all stock option activity of the Company for the nine months ended September 30, 2025:

 

                 
    Number of
Shares		     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contractual
Life (Years)		  
Outstanding, December 31, 2024     1,721,761     $ 1.97        4.71  
Granted     -       -       -  
Exercised     -       -       -  
Forfeited     -       -       -  
Outstanding, September 30, 2025     1,721,761     $ 1.97       4.07  
                         
Exercisable, December 31, 2024     1,721,761     $ 1.97       4.71  
Exercisable, September 30, 2025     1,721,761     $ 1.97       4.14  

 

As of September 30, 2025 and 2024, the aggregate intrinsic value of the Company’s outstanding options was approximately none. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock.