8.     COMMON STOCK

At December 31, 2025, the Company’s authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had issued 56,021,596 shares of common stock and 55,086,888 shares of common stock outstanding, and no shares of preferred stock outstanding.

In 2019, the Company’s stockholders approved the 3Pea International, Inc. 2018 Incentive Compensation Plan (the “2018 Plan”), which was approved by the Board on July 18, 2018. The 2018 Plan permitted the Company to issue awards or options to the officers, directors, employees, consultants and other persons who provided services to our Company or any related entity. Pursuant to the 2018 Plan, 5,000,000 shares of the Company’s common stock were reserved for issuance. Any awards or options that were not settled in shares of common stock were not counted against the limit. Stock options granted under the 2018 Plan generally vested over four or five years and expired in 10 years. Stock awards previously granted under the 2018 Plan generally vested or will vest over four or five years. In general, if an employee is terminated, any unvested options or awards as of the date of termination will be forfeited.

In 2023, the Company’s stockholders approved the Paysign Inc. Equity Incentive Compensation Plan (the “2023 Plan”), which was adopted by the Board on March 17, 2023. The 2023 Plan permits the Company to issue awards or options to the officers, directors, employees, consultants and other persons who provide services to our Company or any related entity. Pursuant to the 2023 Plan, 5,000,000 shares of the Company’s common stock are reserved for issuance. Any awards or options that are not settled in shares of common stock are not counted against the limit. Stock options granted under the 2023 Plan generally vest over four or five years and expire in 10 years. Stock awards granted under the 2023 Plan generally vest over three or five years. In general, if an employee is terminated, any unvested options or awards as of the date of termination will be forfeited. As of December 31, 2025, there were 577,000 shares available for future grants under the 2023 Plan.

The Company issues new shares of common stock upon exercise of stock options or vesting stock awards.

Stock-based compensation expense related to Company grants for the years ended December 31, 2025 and 2024 was $4,262,058 and $2,604,589, respectively, and is included in selling, general and administrative expense. As of December 31, 2025, the Company’s unrecognized stock-based compensation expense related to stock options and stock awards was $0 and $11,256,926, respectively, which are expected to be recognized over a weighted-average period of 0 years for stock options and 2.58 years for stock awards. As of December 31, 2024, the Company’s unrecognized stock-based compensation expense related to stock options and stock awards was $0 and $5,602,432, respectively, which are expected to be recognized over a weighted-average period of 0 years for stock options and 2.80 years for stock awards.

2025 Transactions – During the year ended December 31, 2025, the Company issued 1,663,214 shares of common stock for vested stock awards and the exercise of stock options. The Company received proceeds of $660,654 for the exercise of stock options.

During the year ended December 31, 2025, the Company repurchased 100,000 shares of its common stock at a cost of $375,786 or a weighted average price of $3.76 per share, respectively.

During the year ended December 31, 2025, the Company granted 6,356,000 restricted stock awards, of which 1,366,663 shares are subject to performance-based vesting and service requirements and 2,500,000 are part of the Gamma acquisition (see “Note 3- ACQUISITION” in the notes to the accompanying consolidated financial statements). For the stock awards granted, the weighted average price was $2.55 and vest over a period of one to five years. Awards under performance conditions vest when the Company achieves specific defined earnings target and the employee provides service through each of the vesting periods. The performance targets were achieved as of December 31, 2025. Compensation costs for performance awards would be reversed if the performance criteria is not met.

2024 Transactions – During the year ended December 31, 2024, the Company issued 906,000 shares of common stock for vested stock awards and the exercise of stock options. The Company received proceeds of $28,800 for the exercise of stock options.

During the year ended December 31, 2024, the Company repurchased 136,700 shares of its common stock at a cost of $495,045 or a weighted average price of $3.62 per share, respectively.

The Company also granted 675,000 restricted stock awards during the year ended December 31, 2024. For the stock awards granted, the weighted average price was $3.74 and vest over a period of eight months to five years.

Stock Options

A summary of stock options activity for the years ended December 31, 2025 and 2024 is presented as follows:

A summary of unvested options activity for the years ended December 31, 2025 and 2024 was as follows:

The weighted average grant date fair value of options granted and the total intrinsic value of options exercised for the years ended December 31, 2025 and 2024 is as follows:

The Company uses the Black-Scholes option pricing model to estimate the fair value and compensation cost associated with employee stock options, which requires the consideration of historical employee exercise behavior, the volatility of the Company’s stock price, the weighted-average risk-free interest rate and the weighted-average expected life of the options. Forfeitures are included when they are incurred. Any changes in these assumptions may materially affect the estimated fair value of the share-based award. There were no options granted during the years ended December 31, 2025 and 2024.

Stock Awards

A summary of stock awards activity for the years ended December 31, 2025 and 2024 was as follows: