Stockholders’ (Deficit) Equity

3 Months Ended

Mar. 31, 2025

Equity [Abstract]

Stockholders’ (Deficit) Equity

Note 19. Stockholders’ (Deficit) Equity

On January 28, 2025, the Board of Directors of the Company approved a reverse stock split of the Company’s Common Stock at a ratio of 1-for-20 shares, which reverse stock split became effective on March 14, 2025.

Preferred Stock

The Company is authorized to issue 1,250,000 shares of preferred stock, with a par value of $0.0001 per share, with such designation rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of March 31, 2025, there were 111 shares of Class A Preferred Stock issued and outstanding, and there were 111 shares of Class A Preferred Stock issued and outstanding on December 31, 2024. The holders of preferred stock shall be entitled to receive, and the Company shall pay, dividends on shares of preferred stock equal (on an as-if-converted-to-Class-A-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Class A Common Stock when, as and if such dividends are paid on shares of the Class A Common Stock. No other dividends shall be paid on the preferred stock. The terms of the preferred stock provide for an initial conversion price of $10.00 per share of Class A Common Stock, which conversion price is subject to downward adjustment on each of the dates that are 10 days, 55 days, 100 days, 145 days and 190 days after the effectiveness of a registration statement registering the shares of Class A Common Stock issuable upon conversion of the preferred stock to the lower of the Conversion Price and the greater of (i) 80% of the volume weighted average price of the Class A Common Stock for the prior five trading days and (ii) $50.00 (the “Floor Price”), provided that, so long as a preferred stock holders continues to hold any preferred shares, such preferred stock holder will be entitled to receive the aggregate shares of Class A Common Stock that would be issuable based upon its initial purchase of preferred stock at the adjusted Conversion Price. Additionally, on January 25, 2023, at a special meeting of the Company’s stockholders, the stockholders approved a reduction in the floor conversion price of the outstanding preferred stock from $40.00 per share to $25.00 per share.

Common Stock

The Company is authorized to issue up to 130,000,000 shares of Class A Common Stock, with a par value of $.0001 per share. Holders of the Company’s Class A Common Stock are entitled to one vote for each share. As of March 31, 2025 and December 31, 2024, there were 2,786,538 and 2,783,667 shares of Class A Common Stock issued and outstanding, respectively. As of March 31, 2025 and December 31, 2024, 183,369 Class A Common Stock are held by the purchasers under Forward Purchase Agreement dated June 16, 2022, by and among the Company and such purchasers.

2022 Equity Incentive Plan

Share-based compensation expense recognized in the three months ended March 31, 2025 and March 31, 2024 totaled $249,239 and $612,124, respectively.

The 2022 Equity Incentive Plan was approved by the Company’s stockholders on June 28, 2022. The 2022 Plan permits the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, stock bonus awards, and performance compensation awards. The Company has not issued stock appreciation rights, restricted stock, stock bonus awards, or performance compensation awards in the three months ended March 31, 2025 and March 31, 2024. As of March 31, 2025, a total of 351,857 shares of common stock were authorized for issuance under the Company’s equity incentive plan, of which 53,658 shares remained available for future issuance.

Stock Options

Stock options are awarded to encourage ownership of the Company’s Class A Common Stock by employees and to provide increased incentive for employees to render services and to exert maximum effort for the success of the Company. The Company’s incentive stock options generally permit net-share settlement upon exercise. The option exercise price, vesting schedule and exercise period are determined for each grant by the administrator (person appointed by board to administer the stock plans) of the applicable plan. The Company’s stock options generally have a 10-year contractual term.

The assumptions used to determine the fair value of options granted in the three months ended March 31, 2025 using the Black-Scholes-Merton model are as follows:

Dividend yield	-		%
Risk-free interest rate	3.62 to 4.23		%
Expected volatility (weighted-average and range, if applicable)		100	%
Expected term		6 to 6.5 years

The expected term of the options granted is calculated based on the simplified method by taking average of contractual term and vesting period the awards. The shares and the redeemable warrants of the Company were listed on the stock exchange for a limited period of the time and the share price has also dropped significantly from the date of listing. Based on these factors Management has considered the expected volatility at 100% for the current period. The risk-free interest rate used is the current yield on U.S. Treasury notes with a term equal to the expected term of the options at the grant date. The expected dividend yield is based on annualized dividends on the underlying share during the expected term of the option.

A summary of the Company’s stock option activities and related information for the three months ended March 31, 2025 is as follows:

Stock Option	No. of Stock Option			Weighted-Average Grant Date Fair Value Per Stock Option			Weighted-Average Remaining Contractual Life (in Years)
January 1, 2025		105,090		$	98.55			0.65
Granted		127,153			3.40			1.26
Exercised		-			-			-
Expired		-			-			-
Cancelled / Forfeited		(20,731	)		(69.07	)		-
March 31, 2025		211,512		$	44.24			0.93

A summary of the Company’s stock option activities and related information for the year ended December 31, 2024 is as follows:

Stock Option	No. of Stock Option			Weighted-Average Grant Date Fair Value Per Stock Option			Weighted-Average Remaining Contractual Life (in Years)
January 1, 2024		114,301		$	108.62			1.65
Granted		-			-			-
Exercised		-			-
Expired		-			-			-
Cancelled / Forfeited		(9,211	)		(76.60	)		-
December 31, 2024		105,090		$	98.55			0.65

The following options were outstanding at their respective exercise price:

Exercise price options outstanding	March 31, 2025		December 31, 2024
$8.00		45,757		-
$9.68		81,396		-
$31.20		15,034		18,265
$51.60		17,500		17,500
$80.00		6,825		6,825
$133.40		45,000		62,500
Total		211,512		105,090

As of March 31, 2025, there was $499,035 of unrecognized share-based compensation expense related to stock options. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately one years based on vesting under the award service conditions.

Restricted Stock Units (“RSUs”)

A summary of the Company’s RSU activities and related information for the three months ended March 31, 2025 is as follows:

Restricted Stock Units	No. of RSU			Weighted-Average Grant Date Fair Value Per RSU		Weighted-Average Remaining Contractual Life (in Years)
January 1, 2025		8,583		$	26.20		1.00
Granted		-			-		-
Vested		(4,292	)		26.20		-
Expired					-
Cancelled / Forfeited		(980	)		-		-
March 31, 2025		3,311		$	26.20		0.75

A summary of the Company’s RSU activities and related information for the year ended December 31, 2024 is as follows:

Restricted Stock Units	No. of RSU			Weighted-Average Grant Date Fair Value Per RSU		Weighted-Average Remaining Contractual Life (in Years)
January 1, 2024		16,175		$	26.20		2.00
Granted		-			-		-
Vested		(5,392	)		26.20		-
Expired		-			-
Cancelled / Forfeited		(2,200	)		26.20		-
December 31, 2024		8,583		$	26.20		1.00

The following RSU were outstanding at their respective vest price:

Vest price RSU outstanding	March 31, 2025		December 31, 2024
$26.20		3,311		8,583
Total		3,311		8,583

As of March 31, 2025, there was $65,613 of unrecognized share-based compensation expense related to RSU. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately nine months based on vesting under the award service conditions.