STOCKHOLDERS’ EQUITY (DEFICIT)

9 Months Ended

Sep. 30, 2025

Equity [Abstract]

STOCKHOLDERS’ EQUITY (DEFICIT)

NOTE 10 STOCKHOLDERS’ EQUITY (DEFICIT)

(A) Common Stock

The Company issued the following common stock during the nine months ended September 30, 2025, and 2024:

Transaction Type	Shares Issued		Valuation		Average Value Per Share
2025 Equity Transactions
Common stock issued, pursuant to services provided		5,180,254	$	10,027,416	$	1.94
Common stock issued pursuant to stock at the market offering, net		3,875,013		4,672,383		1.21
Common stock issued pursuant to conversion of preferred stock and related dividends		251,935		500,000		1.98
2024 Equity Transactions
Common stock issued, pursuant to services provided		3,395,915	$	9,035,221		$ 0.82 - 1.78
Common stock issued pursuant to stock at the market offering, net		3,535,067		4,330,295		0.95 - 1.64
Common stock issued pursuant to exercise of options, net		128,023		7,500		0.10
Common stock issued pursuant to acquisition (1)		1,853,421		-		-

(1 ) Common stock issued pursuant to acquisition consists of shares issued in April 2024 pursuant to the Belami acquisition. The value of the shares issued in April 2024 was reflected in the common stock and additional paid-in capital at the date of acquisition in 2023.

(B) Preferred Stock Series A-1

The following is a summary of the Company’s Preferred Stock A-1 activity during the nine months ended September 30, 2025:

Transaction Type	Quantity			Carrying Value			Value per Share, gross
Preferred Stock Series A-1 Balance at January 1, 2025		240,000		$	6,000,000		$	25
Issuance		154,000			3,674,167			25
Conversion to common stock		(20,000	)		(500,000	)		25
Preferred Stock Series A-1 Balance at September 30, 2025		374,000		$	9,174,167		$	25

During May 2025, the Company increased the authorized amount of shares of Series A-1 Preferred Stock to 480,000 shares. In March 2025 a holder converted 20,000 Preferred stocks Series A-1 into shares of common stock, within terms.

The designations of each class of preferred stock are as follows:

Series A Preferred Stock (temporary equity):

● Cumulative dividend of 8% annually, 12% if paid after dividend date;

● Original issue price of $25 per share;

● Conversion option at the holder’s option at $1.20 per share;

● Redemption at the price of $25 per share at the Company’s option after 5 years or upon change of control (substantially within the control of the holder);

● Voting rights on as converted basis.

Series A-1 Preferred Stock (permanent equity):

● Cumulative dividend of 8% annually, 12% if paid after dividend date;

● Original issue price of $25 per share;

● Conversion option at the holder’s option at $1.20 per share;

● Redemption at the price of $25 per share at the Company’s option after 3 years or upon change of control (substantially outside the control of the holder);

● Voting rights on as converted basis.

(C) Stock Options and Restricted Stock

The following is a summary of the Company’s stock option activity during the nine months ended September 30, 2025 and 2024:

						Weighted
						Average
						Remaining
				Weighted		Contractual		Aggregate
				Average		Life		Intrinsic
Options	Shares			Exercise Price		(In Years)		Value
Outstanding, January 1, 2025		32,493,392		$	7.29		-	$	1,522,540
Granted		3,393,030			1.22		-		-
Forfeited		(2,882,767	)		7.64		-		-
Outstanding, September 30, 2025		33,003,655		$	6.54		1.99	$	1,596,940
Exercisable, September 30, 2025		13,569,702		$	3.91		2.04	$	1,442,256
Outstanding, January 1, 2024		35,805,976		$	7.33		-	$	740,820
Exercised		210,000		$	0.10		-	$	-
Granted		2,598,500			1.20		-		-
Forfeited		(2,436,835	)		4.80		-		-
Outstanding, September 30, 2024		35,832,641		$	7.08		2.33	$	639,840
Exercisable, September 30, 2024		12,996,349		$	4.31		2.05	$	639,840

The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during nine months ended September 30, 2025 and 2024:

		September 30, 2025			September 30, 2024
		Range			Range
Stock price	$	1.26 - 1.44		$	0.90 - 1.63
Exercise price	$	1.26 - 1.44		$	0.90 - 1.63
Expected life (in years)		2.50 - 3.47 yrs.			2.50 - 4 yrs.
Volatility		102.00 – 102.29	%		36.70 – 96.50	%
Risk-fee interest rate		3.95 - 4.02	%		3.50 - 4.62	%
Dividend yield		-			-

Prior to the second quarter of 2025, the Company did not have historical stock prices that could be reliably determined for a period that is at least equal to the expected terms of its options. The expected options terms, which were calculated using the plain vanilla method, are 3.5 years, and its historical period was 3 years. The Company relied on the expected volatility of comparable peer-group publicly traded companies within its industry sector, to supplement the Company’s historical data for the period of the expected terms of the options that exceeded the period of the Company’s historical volatility data. As of May 1, 2025, the Company uses its historical stock prices to determine its expected volatility.

A summary of the Company’s non-vested restricted stock units and awards (“RSUA”) during nine months ended September 30, 2025 and 2024 are follows:

				Weighted
				Average Grant
	Shares			Due Fair Value
Non-vested restricted stock units, January 1, 2025		6,278,370		$	2.65
Granted		5,478,166			1.21
Vested		(5,402,033	)		1.65
Forfeited		(1,111,102	)		5.59
Non-vested restricted stock units, September 30, 2025		5,243,401		$	1.56
Non-vested restricted stock units, January 1, 2024		4,919,702		$	4.21
Granted		3,789,980			0.69
Vested		(3,681,925	)		2.33
Forfeited		(173,838	)		2.88
Non-vested restricted stock units on September 30, 2024		4,853,919		$	2.93

The weighted-average remaining contractual life of the stock options and restricted units as of September 30, 2025, is 1.1 years.

RSUA give the right to receive one share of the Company’s common stock. RSUAs 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 RSUA awards is expensed on a straight-line basis over the vesting period.

The Company recognized compensation expenses of $ 8,038,763, and $7,168,301, respectively, related to RSUs and RSAs during the nine-month periods ending September 30, 2025 and 2024, respectively. The Company recognized compensation expenses of $ 1,988,444 and $1,866,919, respectively, related to stock options during the nine-month periods ending September 30, 2025 and 2024, respectively.

The options and RSUAs are granted to the Company’s employees, board members, and certain consultants. There is no difference in characteristics of the awards other than the stock options have to be exercised and restricted awards and units do not. The vesting of the options, restricted stock units or awards is based on the requisite service period of the employees and the non-employee’s vesting period is generally based on a period of up to six years. The maximum contractual term of the options is up to 5 years. The number of shares available for grant of options, and restricted stock units or awards amounts to 12,981,386 at September 30, 2025.

Unamortized future stock-based compensation expense was $7.5 million as of September 30, 2025.

(D) Warrants

The following is a summary of the Company’s warrant activity during nine months ended September 30, 2025 and 2024:

	Number of Warrants			Weighted Average Exercise Price
Balance, January 1, 2025		1,523,667		$	4.30
Issued		64,750			1.20
Exercised		-			-
Forfeited		-			-
Balance, September 30, 2025		1,588,417		$	5.50
Balance, January 1, 2024		2,063,522		$	5.76
Issued		-			-
Exercised		-			-
Forfeited		(245,999	)		9.94
Balance, September 30, 2024		1,817,523		$	5.25

During nine months ended September 30, 2025 and 2024, the Company did not issue any warrants except for warrants issued to a placement agent in connection with its Series A -1 Preferred offerings in the second quarter of 2025.