STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 16 – STOCK-BASED COMPENSATION

Options

On August 6, 2021, the Board of Directors and shareholders of the Company approved a 2021 Equity Incentive Plan (the “2021 Plan”), under which 2,400,000 shares of common shares are authorized for issuance.

On February 3, 2023, the Company awarded options to purchase 100,000 shares of common shares pursuant to the 2021 Plan at an exercise price of $1.17 per share to an employee of the Company. The options vest 50% on the grant date and February 1, 2024, respectively, with the expiration date on February 3, 2033.

On August 25, 2023, the Company awarded options to purchase 2,000 shares of common shares pursuant to the 2021 Plan at an exercise price of $1.10 per share to an employee of the Company. The options vest on each annual anniversary of the date of issuance, in an amount equal to 25% of the applicable shares of common shares, with the expiration date on August 25, 2033.

On August 1, 2023, the Board of Directors of the Company approved a 2023 Equity Incentive Plan (the “2023 Plan”), under which 2,000,000 shares of common shares are authorized for issuance. No shares were issued pursuant to the 2023 Plan as of September 30, 2024.

The following table summarizes the stock options activity and related information for the nine months ended September 30, 2024 and 2023:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)		Intrinsic Value
As of January 1, 2023		1,466,500		$	2.50		8.94	$	-
Granted		102,000			1.17		9.36		-
Exercised		-			-		-		-
Forfeited		(9,500	)		2.50		-		-
As of September 30, 2023		1,559,000		$	2.41		8.27	$	-
As of January 1, 2024		1,547,000		$	2.41		8.01	$	-
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited		(35,000	)		2.42		-		-
As of September 30, 2024		1,512,000		$	2.41		7.26	$	-
Vested and exercisable as of September 30, 2024		813,250		$	2.34		7.28	$	-

The Company calculated the fair value of options granted in the nine months ended September 30, 2023 using the Black-Scholes model. Significant assumptions used in the valuation include expected volatility, risk-free interest rate, dividend yield and expected exercise term.

For the three and nine months ended September 30, 2024, the Company recognized stock-based compensation related to options of $73,457 and $184,501, respectively. For the three and nine months ended September 30, 2023, the Company recognized stock-based compensation related to options of $144,306 and $479,122, respectively. The outstanding unamortized stock-based compensation related to options was $192,773 (which will be recognized through December 2025) as of September 30, 2024.

Restricted Stock Units (“RSUs”)

On March 22, 2023, the Company entered into agreements with employees and service providers of Sigmaways and granted 671,350 RSUs pursuant to the 2021 Plan. The RSUs were fully vested upon issuance. The fair value of the RSUs at grant date was $691,491.

The following table summarizes the RSUs activity for the nine months ended September 30, 2024 and 2023:

	Number of RSUs			Weighted Average Grant Date Fair Value Per Share
Unvested as of January 1, 2023		85,820		$	4.95
Granted		671,350			1.03
Vested		(692,804	)		1.15
Forfeited		-			-
Unvested as of September 30, 2023		64,366		$	4.95
Unvested as of January 1, 2024		64,366		$	4.95
Granted		-			-
Vested		(21,454	)		4.95
Forfeited		-			-
Unvested as of September 30, 2024		42,912		$	4.95

For the three and nine months ended September 30, 2024, the Company recognized stock-based compensation related to RSUs of $15,615 and $52,325, respectively. For the three and nine months ended September 30, 2023, the Company recognized stock-based compensation related to RSUs of $29,000 and $788,577, respectively. The outstanding unamortized stock-based compensation related to RSUs was $48,785 (which will be recognized through February 2026) as of September 30, 2024.