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Note 10 - Stockholders' Equity
 3 Months Ended
Mar. 31, 2025
Notes to Financial Statements  
Equity [Text Block]

NOTE 10 – STOCKHOLDERS’ EQUITY

 

Common Stock – The Company has 50,000,000 authorized shares of Common Stock, $0.001 par value. As of March 31, 2025 and December 31, 2024, there were 9,606,024 and 9,475,443 shares of Common Stock issued and outstanding, respectively.

 

Stock Issuances 

 

During the three months ended March 31, 2025, the Company has made the following issuances of Common Stock: 

 

On January 1, 2025, the Company issued 30,703 shares of Common Stock to settle RSUs. The RSUs were valued at $81,886 for services provided by management in 2024. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended December 31, 2024. 

 

On January 3, 2025, the Company issued 52,350 shares of Common Stock to settle RSUs. The RSUs were valued at $183,750 for services provided by the Board of Directors in 2024. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended December 31, 2024.

 

On January 3, 2024, the Company issued 75,921 shares of Common Stock to settle RSUs. The RSUs were valued at $245,899 for services provided by management in 2024. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended December 31, 2024. In connection with the issuance, 28,394 shares of Common Stock, with a total value of $53,097, were withheld from vesting to settle tax withholdings associated with stock-based compensation.

 

Warrants 

 

On March 26, 2025, the Company entered into a Second Amendment to the Note and Warrant Purchase Agreement (the "Second Amendment") originally dated June 22, 2022, with the holders of the Company’s senior promissory notes. In connection with the Second Amendment, the parties executed Allonge No. 2 (the "Allonges") to each of the existing amended notes, resulting in an extension of the maturity date from January 1, 2026 to May 1, 2027.

 

Additionally, pursuant to the Allonges, beginning on January 1, 2026, the notes will bear interest at a rate of 10% per annum, payable semiannually. In the event of a default or if the notes are not repaid on or before the new maturity date, the interest rate increases to 13% per annum, with a monthly 1% step-up up to a cap of 16% per annum, payable monthly. Accrued interest (excluding default interest) may be paid in cash or in shares of common stock, at the Company’s election, subject to certain limitations.

 

As part of the transaction, the Company and the noteholders also agreed to amend and restate the related warrants, reducing the exercise price from $5.20 to $2.00 per share and extending the expiration date to December 31, 2029. The repricing resulted in an incremental change in warrant value of $220,000.

 

The following is a summary of the periodic changes in warrants outstanding for the three months ended March 31, 2025, and 2024:

 

  

2025

  

2024

 

Outstanding, December 31

  11,391,225   5,021,354 

Warrants issued in connection with public offering and private placement

  -   - 

Exercises and conversions

  -   - 

Outstanding, March 31

  11,391,225   5,021,354 

 

 

Stock-based Compensation 

 

In 2013, the Company’s Board of Directors adopted a Share Incentive Plan (the “Incentive Plan”). Under the terms and conditions of the Incentive Plan, the Board of Directors is empowered to grant stock awards, including RSUs, to officers, directors, and consultants of the Company. At March 31, 2025, 26,042 RSUs were granted and outstanding under the Incentive Plan. Directors of the Company receive share compensation consisting of annual grants of $36,750 ($73,500 for the Chairman of the Board) in RSUs per annum with one-year vesting.

 

In 2022, the Company’s Board of Directors adopted an Equity Incentive Plan (the “2022 Incentive Plan”). Under the terms and conditions of the 2022 Incentive Plan, the Board of Directors is empowered to grant stock awards, including RSUs, to officers and directors of the Company. At March 31, 2025, 528,529 RSUs were granted and outstanding under the 2022 Incentive Plan.

 

The Company recognizes compensation costs for RSU grants to Directors and management based on the stock price on the date of the grant.

 

The Company recognized stock-based compensation expense related to RSU grants of $241,245 and $193,321 for the three-month periods ended March 31, 2025, and 2024, respectively. On March 31, 2025, the Company had $1,067,746 of unrecognized compensation cost related to non-vested stock grants.

 

A summary of the status of the RSUs as of March 31, 2025 and changes during the period are presented below:

 

  

March 31, 2025

 
      

Weighted

     
      

Average

  

Aggregated

 
  

Number of

  

Grant-Date

  

Intrinsic

 
  

units

  

Fair value

  

Value

 
             

Outstanding, December 31, 2024

  357,903  $3.25  $- 

Granted

  376,431   1.97   - 

Vested and settled with share issuance

  (158,975)  3.22   - 

Forfeited

  (20,788)  2.33   - 

Outstanding, March 31, 2025

  554,571  $2.42  $-