NOTE 19 – EQUITY COMPENSATION

Prior to the Share Exchange, the Company had no equity incentive plans in place.

Effective July 1, 2025, upon the completion of the Share Exchange, the legacy HUSA entity had the following equity incentive plans in place:

The Houston American Energy Corp. 2008 Equity Incentive Plan (the “2008 Plan”). The terms of the 2008 Plan, as amended in 2012 and 2013, allowed for the issuance of up to 48,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock. This plan has now expired.

The Houston American Energy Corp. 2017 Equity Incentive Plan (the “2017 Plan”). The terms of the 2017 Plan allow for the issuance of up to 40,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock. Persons eligible to participate in the Plans are key employees, consultants and directors of the Company.

The Houston American Energy 2021 Equity Incentive Plan (the “2021 Plan” and, together with the 2008 Plan and the 2017 Plan, the “Plans”). allows for the issuance of up to 50,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock. Persons eligible to participate in the Plans are key employees, consultants and directors of the Company

Effective October 9, 2025, the Company adopted the Houston American Energy Corp. 2025 Equity Incentive Plan (the “2025 Plan”). The terms of the 2025 Plan allow for the issuance of up to 750,000 shares of the Company’s common stock pursuant to the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. Persons eligible to participate in the 2025 Plan are key employees, consultants and directors of the Company.

As of December 31, 2025, there were 630,000 shares of common stock available for issuance pursuant to future stock or option grants under the 2025 Plan and no further shares of common stock available for issuance pursuant to future stock or option grants under the 2017 and 2021 Plans.

Stock Options Issued and Outstanding

Option activity under the legacy HUSA Equity Plans since the Share Exchange is presented in the table below:

 SCHEDULE OF OPTION ACTIVITY

A summary of non-vested non-qualified stock options activity under the legacy HUSA Equity Plans since the Share Exchange is presented in the table below:

SUMMARY OF NON-VESTED STOCK OPTIONS ACTIVITY FOR EMPLOYEES AND CONSULTANTS 

The aggregate intrinsic value for the stock options outstanding and exercisable as of December 31, 2025, was zero because these options were out of the money on December 31, 2025.

As of December 31, 2025, there was $9,039 of unrecognized stock-based compensation expense related to non-vested stock options.

Share awards

Effective June 27, 2025, the HUSA Board of Directors approved the issuance of 120,000 shares of Common Stock to the legacy executive officers, directors and employees of HUSA, subject to shareholder approval. Effective September 8, 2025, the share issuance was approved by written consent of the Company’s controlling shareholder and the Company recognized stock-based compensation of $786,000 which has been recognized in general and administrative expenses in its statement of operations based on the Company’s closing share price of $6.55 at the date of approval.

Accrued Stock Bonuses

During the year ended December 31, 2025, the Company accrued $553,230 in general and administrative expenses in its statement of operations in respect of stock bonuses to be paid to directors and certain consultants for their work for the Company during the course of the year. As the bonuses were not finalized or communicated to the individuals concerned prior to the year end, no issuance of stock was recorded prior to the end of the year.

Restricted Stock / Option Awards

Effective August 1, 2025, the Board authorized the issuance of $80,000 of restricted stock or options awards to four directors as part of their annual compensation and a further $60,000 of restricted stock or options awards to two of these four directors as a signing on fee. The restricted stock or options awards were to vest over a 12-month period and were subject to the approval of the 2025 Plan. As the approval of the 2025 Plan by the Company’s controlling shareholder was considered to be perfunctory, the Company began accruing for the compensation expense associated with these awards over their 12-month vesting period on a straight-line basis commencing August 1, 2025. As of December 31, 2025, stock compensation of $183,333 had been recognized in respect of these restricted stock or options awards and there was a balance of $256,667 unvested stock compensation to be recognized through July 31, 2026. The terms of the awards were not finalized prior to December 31, 2025