Shareholders’ Deficit

3 Months Ended

Mar. 31, 2025

NOTE 13 – SHAREHOLDERS’ DEFICIT

Private Placements

During the three months ended March 31, 2025, the Company sold 200,000 shares of common stock to one investor in a private placement transaction. The Company received $10,000 in proceeds from the sale. In connection with the stock sales, the Company also agreed to extend the expiration date on 1,176,471 warrants to purchase shares of common stock at an exercise price of $0.15 per share for an additional two years.

During the three months ended March 31, 2024, the Company sold 5,100,000 shares of common stock to three investors in separate private placement transactions. The Company received $355,000 in proceeds from the sales. In connection with the stock sales, the Company also issued 2,500,000 five-year warrants to purchase shares of common stock at an exercise price of $0.17 per share.

Shares issued to Consultants

During the three months ended March 31, 2024, the Company issued to a consultant a ten-year stock option to purchase 2,504,974 shares of common stock at an exercise price equal of $0.0569 in satisfaction of common stock issuable accrued to the consultant for services provided between 2021 and 2024. No shares were issued to consultants during the three months ended March 31, 2025.

Common Stock Issuable

As of March 31, 2025 and December 31, 2024, the Company was obligated to issue the following shares:

	March 31, 2025				December 31, 2024
	Amount		Shares		Amount		Shares

Shares issuable to employees and consultants	$	84,632		1,491,760	$	81,632		1,430,536
Shares issuable to independent directors		80,000		1,632,652		80,000		1,632,652
Private placement issuable		3,245		200,000		—		—
	$	167,877		3,324,412	$	161,632		3,063,188

Stock Warrants

Transactions involving our stock warrants during the three months ended March 31, 2025 and 2024 are summarized as follows:

	2025						2024
				Weighted						Weighted
				Average						Average
				Exercise						Exercise
	Number			Price			Number			Price
Outstanding at beginning of the period		101,488,821		$	0.16			77,414,648		$	0.20
Granted during the period		1,353,356		$	0.04			9,160,000		$	0.09
Exercised during the period		—		$	—			—		$	—
Expired during the period		(22,542,047	)	$	(0.13	)		(1,217,402	)	$	(0.28	)
Outstanding at end of the period		80,300,130		$	0.17			85,357,246		$	0.19

Exercisable at end of the period		80,300,130		$	0.17			85,357,246		$	0.19

Weighted average remaining life		4.5		years				2.7		years

The following table summarizes information about the Company’s stock warrants outstanding as of March 31, 2025:

	Warrants Outstanding							Warrants Exercisable
				Weighted-
				Average		Weighted-				Weighted-
				Remaining		Average				Average
	Exercise	Number		Contractual		Exercise		Number		Exercise
	Prices	Outstanding		Life (years)		Price		Exercisable		Price
$	0.0001 to 0.09		37,159,893		7.7	$	0.05		37,159,893	$	0.05
$	0.10 to 0.24		20,674,848		2.7	$	0.15		20,674,848	$	0.15
$	0.25 to 0.49		19,505,465		0.8	$	0.33		19,505,465	$	0.33
$	0.50 to 1.05		2,959,924		1.3	$	0.68		2,959,924	$	0.68
$	0.05 to 1.00		80,300,130		4.5	$	0.17		80,300,130	$	0.17

During the three months ended March 31, 2025 and 2024, the Company issued 1,353,356 and 9,160,000 warrants, respectively, the aggregate grant date fair value of which was $25,625 and $385,633, respectively. The fair value of the warrants was calculated using the following range of assumptions:

	2025	2024
Pricing model utilized	Binomial Lattice	Binomial Lattice
Risk free rate range	4.24%	3.97% to 4.20%
Expected life range (in years)	10.00 years	5.00 to 10.00 years
Volatility range	173.27%	140.94% to 173.25%
Dividend yield	0.00%	0.00%
Expected forfeiture	44.00%	33.00%

There were no warrants exercised during the three months ended March 31, 2025 or 2024.

Equity Incentive Plans

On January 1, 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 EIP”) for the purpose of having equity awards available to allow for equity participation by its employees, consultants and non-employee directors. The 2016 EIP allowed for the issuance of up to 15,503,680 shares of the Company’s common stock, which may be issued in the form of stock options, stock appreciation rights, or common shares. The 2016 EIP is governed by the Board, or a committee that may be appointed by the Board in the future. The 2016 EIP expired during 2021 but allows for the prospective issuance of common shares upon vesting of stock awards or exercise of stock options granted prior to expiration of the 2016 EIP.

On September 9, 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 EIP” and, together with the 2016 EIP, the “EIPs”) for the purpose of having equity awards available to allow for equity participation by its employees, consultants and non-employee directors. The 2021 EIP allows for the issuance of up to 20,000,000 shares of the Company’s common stock, which may be issued in the form of stock options, stock appreciation rights, or common shares. The 2021 EIP is governed by the Board, or a committee that may be appointed by the Board in the future.

Amounts recognized in the financial statements with respect to the EIPs in the three months ended March 31, 2025 and 2024 were as follows:

	Three Months Ended March 31,
	2025		2024
Total cost of share-based payment plans during the period	$	7,126	$	35,986
Amounts capitalized in deferred equity compensation during period	$	—	$	—
Amounts written off from deferred equity compensation during period	$	—	$	57,147
Amounts charged against income for amounts previously capitalized	$	—	$	—
Amounts charged against income, before income tax benefit	$	7,126	$	93,133
Amount of related income tax benefit recognized in income	$	—	$	—

Stock Options

Stock options granted under the EIPs typically vest over a period of three to four years or based on achievement of Company and individual performance goals. The following table summarizes stock option activity as of and for the three months ended March 31, 2025 and 2024:

	2025				2024
			Weighted					Weighted
			Average					Average
			Exercise					Exercise
Stock options	Number		Price		Number			Price
Outstanding at beginning of period		6,157,422	$	0.07		5,093,738		$	0.16
Granted during the period		—	$	—		4,504,974		$	0.06
Exercised during the period		—	$	—		—		$	—
Forfeited during the period		—	$	—		(449,982	)	$	(0.21	)
Outstanding at end of period		6,157,422	$	0.07		9,148,730		$	0.10

Options exercisable at period-end		5,007,422	$	0.07		7,063,146		$	0.11

As of March 31, 2025, there was $26,924 of total unrecognized compensation cost related to options granted under the EIPs. That cost is expected to be recognized over a weighted-average period of 1.4 years.

The weighted-average grant-date fair value of options granted during the three months ended March 31, 2025 and 2024 was (none granted) and $0.04, respectively. The total fair value of options vested during the three months ended March 31, 2025 and 2024 was $7,966 and $137,040, respectively. No options were exercised during the three months ended March 31, 2025 or 2024. Stock based compensation expense related to stock options was $7,126 and $47,900 in the three months ended March 31, 2025 and 2024, respectively.

The fair value of each stock option award is estimated on the date of grant using a binomial lattice option-pricing model based on the assumptions noted in the following table. The Company’s accounting policy is to estimate forfeitures in determining the amount of total compensation cost to record each period. The fair value of options granted for the three months ended March 31, 2025 and 2024 was calculated using the following range of assumptions:

	2025	2024
Pricing model utilized	No Grants	Binomial Lattice
Risk free rate range	No Grants	4.20%
Expected life range (in years)	No Grants	10.00 years
Volatility range	No Grants	173.25%
Dividend yield	No Grants	0.00%
Expected forfeiture	No Grants	30.00%

The following table summarizes the status and activity of nonvested options issued pursuant to the EIPs as of and for the three months ended March 31, 2025 and 2024:

	2025						2024
				Weighted						Weighted
				Average						Average
				Grant Date						Grant Date
Stock options	Shares			Fair Value			Shares			Fair Value
Nonvested options at beginning of period		1,350,000		$	0.05			1,073,084		$	0.06
Granted		—		$	—			4,504,974		$	0.04
Vested		(200,000	)	$	(0.04	)		(3,442,474	)	$	(0.04	)
Forfeited		—		$	—			(50,000	)	$	(0.08	)
Nonvested options at end of period		1,150,000		$	0.05			2,085,584		$	0.05

Stock Grants

Stock grant awards made under the EIPs typically vest either immediately or over a period of up to four years. The following table summarizes stock grant activity as of and for the three months ended March 31, 2025 and 2024:

	2025				2024
			Weighted					Weighted
			Average					Average
				Grant Date					Grant Date
Stock Grants		Shares		Fair Value		Shares			Fair Value
Nonvested grants at beginning of period		—	$	—		1,484,488		$	0.05
Granted		—	$	—		—		$	—
Vested		—	$	—		(408,164	)	$	(0.05	)
Forfeited		—	$	—		(50,000	)	$	(0.12	)
Nonvested grants at end of period		—	$	—		1,026,324		$	0.05

As of March 31, 2025, there was $-0- of total unrecognized compensation cost related to stock grants made under the EIPs. That cost is expected to be recognized over a weighted-average period of 1.5 years. No grants were made in the three months ended March 31, 2025 or 2024. The aggregate fair value of share grants that vested during the three months ended March 31, 2025 and 2024 was $-0- and $20,000, respectively. Stock based compensation expense related to stock grants was $-0- and $1,796 in the three months ended March 31, 2025 and 2024, respectively.

The fair value of each stock grant is calculated using the closing sale price of the Company’s common stock on the date of grant. The Company’s accounting policy is to estimate forfeitures in determining the amount of total compensation cost to record each period.

HealthLynked Corp 10-Q