NOTE 26 — EMPLOYEE BENEFIT PLAN AND EQUITY INCENTIVE PLAN

The Company and its wholly owned subsidiaries have 401(k) profit sharing plans that covers substantially all of its employees. The Company’s 401(k) plan matches dollar for dollar the first 3% of the employee’s contribution and then 50% of contributions for the next 2%, for a maximum match of 4%. There are certain limitations for highly compensated employees. The Company’s contributions to these plans for the years ended December 31, 2025 and 2024, were approximately $1,062,087 and $803,510, respectively.

Equity Incentive Plan

On June 29, 2017, the shareholders of the Company approved the Dolphin Digital Media, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). There are 1,000,000 shares available to grant under the 2017 Plan. During the year ended December 31, 2025 the Company did not issue any awards under the 2017 Plan. During the year ended December 31, 2024, the Company granted Restricted Stock Units (“RSUs”) to certain employees under the 2017 Plan, as detailed in the table below. The fair value of the RSUs granted is determined using the fair value of the Company’s common stock on the date of the grant, which was $2.88.

The RSUs granted during the year ended December 31, 2024, under the 2017 Plan to the Company’s employees vested in four equal installments on the following dates: March 15, 2024, June 15, 2024, September 15, 2024 and December 15, 2024. There was no share-based compensation under the 2017 Plan recognized for the year ended December 31, 2025. The Company recognized compensation expense for RSUs of $17,181 for the year ended December 31, 2024, respectively, which is included in payroll and benefits in the consolidated statements of operations. The related income tax benefit for the year ended December 31, 2024, was inconsequential. As of both December 31, 2025 and 2024, all RSUs were vested and there is no unrecognized compensation expense.

The following table sets forth the activity for the RSUs:

The Company accounts for its share-based compensation expense related to equity instruments under U.S. GAAP, which requires the measurement and recognition of compensation costs for all equity-based payment awards made to employees based on estimated fair values. The Company uses the value of its common stock on the grant date to establish the grant date fair value of the RSUs granted. We have elected to account for forfeitures as they occur. The Company uses authorized and unissued shares to meet share issuance requirements.

Shares issued related to employment agreements

Pursuant to the employment agreement between the Company and Mr. Anthony Francisco, he was entitled to receive share awards amounting to $25,000 at each of certain dates in 2024, in the aggregate amounting to $100,000. The shares were issued based on the 30-day trailing closing sale price for the common stock on the respective dates the shares were issued. Relating to this agreement:

Mr. Francisco’s employment agreement expired in September 2024 and was not renewed.

During the year ended December 31, 2024, the Company paid the salary of certain employees at one if its subsidiaries in fully vested shares of the Company’s common stock. During the year ended December 31, 2024, the Company issued an aggregate of 96,581 shares amounting to $186,032, in the aggregate on different dates throughout the year ended December 31, 2024, following the normal payroll cycle.

During the years ended December 31, 2025 and 2024, the Company issued 20,093 and 24,630, respectively, shares of common stock as bonuses for certain employees. During the year ended December 31, 2024, the Company issued 47,257 shares of common stock in satisfaction of a change of control clause in the employment agreement of a key employee of Elle.