Stockholders’ Equity

3 Months Ended

Mar. 31, 2026

Stockholders’ Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

(A) Preferred Stock

On December 13, 2013, the Board of Directors (the “Board”) of the Company authorized and approved the creation of a new class of preferred stock consisting of 5,000,000 shares authorized, $0.001 par value. The preferred stock is not convertible into any other class or series of stock. The holders of the preferred stock are entitled to 50 votes for each share held. Voting rights are not subject to adjustment for splits that increase or decrease the common shares outstanding. Upon liquidation, the holders of the shares will be entitled to receive $1.00 per share plus redemption provision before assets distributed to other shareholders. The holders of the shares are entitled to dividends equal to common share dividends. As of March 31, 2026 and December 31, 2025, there were 2,000,000 shares of preferred stock outstanding. Once any shares of preferred stock are outstanding, at least 51% of the total number of shares of preferred stock outstanding must approve the following transactions:

a.	Alter or change the rights, preferences or privileges of the preferred stock.
b.	Create any new class of stock having preferences over the preferred stock.
c.	Repurchase any of our common stock.
d.	Merge or consolidate with any other company, except our wholly owned subsidiaries.
e.	Sell, convey or otherwise dispose of, or create or incur any mortgage, lien, or charge or encumbrance or security interest in or pledge of, or sell and leaseback, in all or substantially all our property or business.
f.	Incur, assume or guarantee any indebtedness maturing more than 18 months after the date on which it is incurred, assumed or guaranteed by us, except for operating leases and obligations assumed as part of the purchase price of property.

(B) Common stock issued for services

Effective January 28, 2026, the Company issued shares of restricted common stock, representing compensation for services to be rendered in 2026 and 2027, to the Company’s executive officers and Board members as follows:

Name	Position	No. of Shares of Restricted Common Stock
Bryan McLaren	Chairman of the Board, Chief Executive Officer and Chief Financial Officer		250,000
Berekk Blackwell	President and Chief Operating Officer		150,000
Art Friedman	Independent Director		200,000
David G. Honaman	Independent Director		200,000
Cole Stevens	Independent Director		200,000

Such issuances are subject to forfeiture, depending on continued employment or service with the Company. If a recipient voluntarily resigns or is terminated for cause prior to December 31, 2027, the recipient must return to the Company a pro-rata portion of the issued shares, calculated on a monthly basis. If a change of control occurs at any time prior to December 31, 2027, all clawback provisions will automatically terminate and each recipient will retain 100% of the issued shares, free of any repayment obligation. Additionally, the above executive officers and Board members will each receive a cash payment from the Company to cover their income tax liability associated with the above stock issuances in an amount up to 35% of the cost basis of the shares (the “Payroll Tax Liability”). In the event of a change of control, the Company will pay the full Payroll Tax Liability to each of the above executive officers and Board members prior to consummation of such change of control.

Additionally, effective January 28, 2026, the Company issued 150,000 shares of restricted common stock, representing compensation for services to be rendered in 2026 and 2027, to Mr. Moroney, an employee. The issuance is subject to forfeiture, depending on Mr. Moroney’s continued employment or service with the Company. If Mr. Moroney voluntarily resigns or is terminated for cause prior to December 31, 2027, he must return to the Company a pro-rata portion of the issued shares, calculated on a monthly basis. If a change of control occurs at any time prior to December 31, 2027, all clawback provisions will automatically terminate and Mr. Moroney will retain 100% of the issued shares, free of any repayment obligation. Additionally, Mr. Moroney will receive a cash payment from the Company to cover his Payroll Tax Liability. In the event of a change of control, the Company will pay the full Payroll Tax Liability to Mr. Moroney prior to consummation of such change of control.

The common shares issued above were valued at $437,000, or a per share price of $0.38, based on the quoted closing price of the Company’s common stock on the measurement date, which will be amortized into stock-based compensation expense over the services period. During the three months ended March 31, 2026, the Company recorded stock-based compensation of $54,625, and as of March 31, 2026, the Company recorded prepaid expenses of $382,375, which will be amortized over the remaining service period through December 31, 2027.

Additionally, in connection with the obligation to cover the Payroll Tax Liability as discussed above, the Company recorded additional prepaid expenses and accrued expenses of $152,950, which is equal to 35% of the cost-basis of the shares issued to cover the Payroll Tax Liability associated with the above stock issuances. During the three months ended March 31, 2026, the Company recorded compensation expense of $19,119, and as of March 31, 2026, the Company recorded prepaid expenses of $133,381, which will be amortized over the remaining service period through December 31, 2027. As of March 31, 2026, the amount due to cover the respective Payroll Tax Liability for each recipient of $152,500 is included in accrued expenses on the accompanying unaudited consolidated balance sheet.

(C) Equity incentive plans

On August 9, 2016, the Company’s Board authorized the 2016 Equity Incentive Plan (the “2016 Plan”) and reserved 10,000,000 shares of common stock for issuance thereunder. The 2016 Plan was approved by shareholders on November 21, 2016. The 2016 Plan’s purpose is to encourage ownership in the Company by employees, officers, directors and consultants whose long-term service the Company considers essential to its continued progress and, thereby, encourage recipients to act in the stockholders’ interest and share in the Company’s success. The 2016 Plan authorizes the grant of awards in the form of options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended, options that do not qualify (non-statutory stock options) and grants of restricted shares of common stock. Restricted shares granted pursuant to the 2016 Plan are amortized to expense over the vesting period. Options vest and expire over a period not to exceed seven years. If any share of common stock underlying a stock option that has been granted ceases to be subject to a stock option, or if any shares of common stock that are subject to any other stock-based award granted are forfeited or terminated, such shares shall again be available for distribution in connection with future grants and awards under the 2016 Plan. As of March 31, 2026, 956,250 stock option awards were outstanding and 956,250 options were exercisable under the 2016 Plan. As of December 31, 2025, 1,315,000 stock option awards were outstanding and 1,206,250 options were exercisable under the 2016 Plan. As of March 31, 2026 and December 31, 2025, 9,043,750 and 8,685,000 shares, respectively, were available for future issuance under the 2016 Plan.

The Company maintained its 2014 Equity Compensation Plan through its expiration date in 2024 (the “2014 Plan”). The 2014 Plan has been superseded by the 2016 Plan. Accordingly, no additional shares subject to the existing 2014 Plan will be issued. As of March 31, 2026 and December 31, 2025, options to purchase 250,000 and 250,000 shares of common stock were outstanding and exercisable pursuant to the 2014 Plan, respectively.

(D) Stock options

On January 21, 2025, the Company granted an aggregate of 525,000 stock options to purchase 525,000 of the Company’s common stock at an exercise price of $0.44 per share to certain Board members pursuant to the 2016 Plan (105,000 stock options each). The grant date of the stock options was January 21, 2025 and the options expire on January 21, 2035. The options shall vest evenly on a quarterly basis over 36 months (8,750 options quarterly), beginning immediately. The fair value of these options grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; historical volatility of 82.1%; risk-free interest rate of 4.30%; and a holding period of 6.5 years based on the simplified method. The Company valued these stock options at a fair value of $176,504 and will record stock-based compensation expense over the vesting period. On April 23, 2025, three of the Company’s five directors submitted their respective resignations as Board members and accordingly, 262,500 unvested stock options were cancelled.

On January 19, 2026, all unvested stock options held by Mr. McLaren, Mr. Blackwell, or members of the Board, representing stock options to purchase an aggregate of 298,750 shares of common stock (0, 97,500, 70,000, 70,000, and 61,250 of which were held by Mr. McLaren, Mr. Blackwell, Art Friedman, David G. Honaman and Cole Stevens, respectively), were canceled. All vested stock options as of January 19, 2026 held by Mr. McLaren, Mr. Blackwell or members of the Board remain outstanding and exercisable in accordance with their existing terms.

Effective January 19, 2026, all unvested stock options held by Patrick Moroney, representing stock options to purchase an aggregate of 60,000 shares of common stock, were canceled. Mr. Moroney is a non-executive officer member of the Company’s management team.

For the three months ended March 31, 2026 and 2025, in connection with the reversal of previously recorded stock-based option expense from the cancellation on unvested stock options, and accretion of stock-based option expense, the Company recorded stock option (recovery) expense of $(93,105) and $56,606, respectively. As of March 31, 2026, there was $0 of unvested stock-based compensation expense. The aggregate intrinsic value on March 31, 2026 was $0 and was calculated based on the difference between the quoted share price on March 31, 2026 of $0.40 and the exercise price of the underlying options.

Stock option activities for the three months ended March 31, 2026 are summarized as follows:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance outstanding at December 31, 2025		1,565,000			0.79		5.65	$	8,400
Forfeited		(358,750	)		0.69				-
Balance outstanding at March 31, 2026		1,206,250		$	0.82		4.87	$	-
Exercisable, March 31, 2026		1,206,250		$	0.82		4.87	$	-
Balance non-vested on December 31, 2025		358,750		$	0.69		7.45	$	-
Forfeited		(358,750	)		0.69		-
Vested during the period		-			-		-		-
Balance non-vested on March 31, 2026		-		$	-		-	$	-