Equity

12 Months Ended

Dec. 31, 2024

Equity [Abstract]

Equity

12. Equity

Preferred Stock

As of December 31, 2024 and 2023, the Company was authorized to issue 20 million shares of preferred stock with a par value of $0.001 per share, of which 600,000 shares had been designated as Series A convertible preferred stock. As of each of December 31, 2024 and 2023, there were 166,000 shares of Series A convertible preferred stock issued and outstanding.

In the event of any liquidation, dissolution or winding up of the Company, the holders of preferred stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of common stock, an amount equal to $10 for each share of preferred stock, plus all unpaid dividends that have been accrued, accumulated or declared. As of December 31, 2024, the total liquidation preference on the preferred stock is $1,689,050. The Company may redeem the preferred stock from the holders at any time following the second anniversary of the closing of the original purchase of the preferred stock. The Series A convertible preferred stock can be converted to common stock at 80% of the prevailing market price over the previous 30-day period at the option of the Company.

Holders of preferred stock are entitled to receive preferential cumulative dividends, only if declared by the board of directors, at a rate of 7% per annum per share of the liquidation preference amount of $10 per share. During the years ended December 31, 2024 and 2023, the Board of Directors has declared and paid dividends on the preferred stock of $116,200 and $116,200, respectively. As of each of December 31, 2024 and 2023, preferred dividends are in arrears by $29,050.

December 31, 2023 dividends in arrears were declared and paid in January 2024. December 31, 2024 dividends in arrears were declared and paid in January 2025.

Common Stock

As of December 31, 2024 and 2023, the Company was authorized to issue 100 million shares of common stock with a par value of $0.001 per share, of which 3,001,216 and 2,905,016 shares were issued and outstanding, respectively.

In August 2024, the Company exchanged $10,000 of notes payable and $66,960 of notes payable – related parties for 96,200 shares of common stock at a price of $0.80 per share from the exercise of incentive stock options by two employees.

Stock Options

In 2019, the Company’s Board of Directors approved the creation of the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the issuance of incentive stock options to designated employees, certain key advisors and non-employee members of the Board of Directors with the opportunity to receive grant awards to acquire, in the aggregate, up to 300,000 shares of the Corporation’s common stock. The following table summarizes information about employee stock options outstanding at December 31, 2024:

Outstanding Options				Vested Options
Number Outstanding at December 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price	Number Exercisable at December 31, 2024	Weighted Average Remaining Term		Weighted Average Exercise Price
91,200	5.16	$	0.80	91,200	5.16	$	0.80
10,000	7.50		4.50	10,000	7.50		4.50
10,000	2.50		4.95	10,000	2.50		4.95
111,200	5.13 years	$	1.51	111,200	5.13 years	$	1.51

A summary of information regarding the stock options outstanding is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
Outstanding at December 31, 2022		207,400	$	0.80		7.15 years		—
Issued		—		—		—		—
Exercised		—		—		—		—
Outstanding at December 31, 2023		207,400	$	1.18		7.15 years	$	1,091,236
Issued		—		—		—		—
Exercised		96,200	$	0.80		5.42 years	$	76,960
Outstanding at December 31, 2024		111,200	$	1.51		5.13 years	$	98,496
Exercisable at December 31, 2024		111,200	$	1.51		5.13 years	$	98,496

In August 2024, the Company exchanged $10,000 of notes payable and $66,960 of notes payable – related parties for 96,200 shares of common stock at a price of $0.80 per share from the exercise of incentive stock options by two employees. During the years ended December 31, 2024 and 2023, the Company recognized $14,100 and $28,200, respectively, of stock option expense. As of December 31, 2024, there was no remaining unvested equity compensation.

Stock Warrants

A summary of information regarding the stock options outstanding is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value
Outstanding at December 31, 2022		1,035,000	$	7.09		2.6 years	$	1,549,400
Issued		—		—		—		—
Exercised		—		—		—		—
Outstanding at December 31, 2023		1,035,000	$	7.09		1.6 years	$	355,600
Issued		—		—		—		—
Exercised		—		—		—		—
Outstanding at December 31, 2024		1,035,000	$	7.09		0.6 years		—
Exercisable at December 31, 2024		1,035,000	$	7.09		0.6 years		—

The warrants vested immediately. During the years ended December 31, 2024 and 2023, the Company recognized no stock warrant expense.