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STOCKHOLDERS EQUITY
 3 Months Ended
Mar. 31, 2025
Stockholders' Equity:  
STOCKHOLDERS' EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

 

Preferred stock

 

The Company’s authorized preferred stock consists of 5,000,000 shares of preferred stock, with a par value of $0.001 per share. On November 20, 2020, the Company designated 1,000,000 shares of Series A preferred stock. The Series A preferred stock has a liquidation preference to all other securities, a liquidation value of $25 per share, receives cumulative dividends payable in cash of 12% per year, payable monthly. The Series A preferred stock does not have voting rights, except that the Company may not: 1) create any additional class or series of stock, nor any security convertible into stock of the Company; 2) modify the Series A preferred stock designation; 3) initiate and dividend outside of without approval of at least two-thirds of the holders of the Series A preferred stock. The Company has the right, but not obligation to redeem the Series A preferred stock beginning January 1, 2026, at the liquidation value per share plus any unpaid dividends.

 

On February 28, 2025, the Company issued $70,000 in Series A preferred stock to the sellers of RevenueZen as further discussed in Note 13.

 

During the three months ended March 31, 2025, the Company sold 28,000 shares of Series A preferred stock for $700,000.

 

During the three months ended March 31, 2025 and 2024, the Company recognized $103,921 and $81,645 in dividends to the Series A preferred stockholders, respectively, and made cash dividend payments of $99,250 and $70,122, respectively. As of March 31, 2025 and December 31, 2024, the Company has remaining unpaid dividends of $105,468 and $100,797, respectively.

 

As of March 31, 2025 and December 31, 2024, there were 165,260 and 134,460 Series A preferred stock outstanding, respectively.

 

Common stock

 

The Company’s authorized common stock consists of 50,000,000 shares of common stock, with a par value of $0.001 per share. All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. The shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Board of Directors out of funds legally available. The Company has not declared any dividends on common stock to date.

 

Stock Options

 

On February 28, 2025, the Company issued 79,240 stock options to purchase shares of common stock to the sellers of RevenueZen as further discussed in Note 13. The stock options have an exercise price of $1.34, have a term of 10 years, and are vested immediately. 

 

During the three months ended March 31, 2025, the Company awarded an aggregate of 120,000 common stock options to the non-employee directors of the Company, of which 60,000 vested immediately, and 20,000 per quarter thereafter until fully vested. In addition, the Company awarded 200,000 options to our CFO that vested immediately. The fair value of the stock options was estimated using a Black-Scholes option pricing model and the following assumptions: 1) dividend yield of 0%; 2) risk-free rate of 3.97%; 3) volatility between 139.19% and 141.49% based on a group of peer group companies; and an expected term of five to ten years.

A summary of stock option information is as follows:

 

 

 

Outstanding

Awards

 

 

Weighted Average

Grant Date

Fair Value

 

 

Weighted Average

 Exercise price

 

Outstanding at December 31, 2024

 

 

412,250

 

 

$0.65

 

 

$1.02

 

Granted

 

 

399,240

 

 

 

1.09

 

 

 

1.22

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Expired

 

 

(26,250 )

 

 

(4.40 )

 

 

(5.95)

Forfeited and cancelled

 

 

(8,880 )

 

 

(0.26 )

 

 

(1.38 )

Outstanding at March 31, 2025

 

 

776,360

 

 

$1.09

 

 

$0.95

 

Exercisable at March 31, 2025

 

 

506,360

 

 

$1.03

 

 

$1.19

 

 

The weighted average remaining contractual life is approximately 9.20 years for stock options outstanding with $299,620 of intrinsic value of as of March 31, 2025. The Company recognized stock-based compensation of $272,930 and $17,887 during the three months ended March 31, 2025 and 2024, respectively. The Company has $63,013 additional compensation cost related to options that are expected to vest.

 

Common Stock Warrants

 

A summary of stock warrant information is as follows:

 

 

 

Outstanding

Awards

 

 

Weighted Average

 Grant Date

Fair Value

 

 

Weighted Average

Exercise price

 

Outstanding at December 31, 2024

 

 

6,199,863

 

 

$4.21

 

 

$5.01

 

Granted

 

 

-

 

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Forfeited and cancelled

 

 

-

 

 

 

-

 

 

 

-

 

Outstanding at March 31, 2025

 

 

6,199,863

 

 

$4.21

 

 

$5.01

 

Exercisable at March 31, 2025

 

 

6,199,863

 

 

$4.21

 

 

$5.01

 

 

The weighted average remaining contractual life is approximately 2.40 years for stock warrants outstanding with no intrinsic value of as of March 31, 2025.