NOTE 11—STOCK-BASED COMPENSATION

Share Option Plan

The Company’s equity incentive plans (the “2022 Plan” and the “2025 Plan”), which are shareholder approved, provides for the grant of incentive stock options (“ISOs”), nonqualified stock options (“NQSOs”), restricted stock awards (“RSAs”), stock awards, and performance shares to employees, officers, directors, and consultants of the Company and its affiliates.

The 2022 Plan initially authorized 150,000 shares of common stock for issuance, with an automatic increase on April 1^st of each calendar year (from 2022 through 2031) equal to the lesser of (i) 4% of the total shares of common stock outstanding on the last day of the immediately preceding fiscal year, or (ii) a smaller number of shares as determined by the administrator. As of December 31, 2025, 431,216 shares remain available for future grants under the 2022 Plan.

The 2025 Plan initially authorized 37,611,971 shares of common stock for issuance, with a potential increase on January 1^st of each calendar year equal to 5% of the outstanding shares on December 31^st of the prior year, provided, that the Board or Compensation Committee of the Board may, in its discretion, reduce the amount by which the plan increases. As of December 31, 2025, 21,856,173 shares remain available for future grants under the 2025 Plan.

Stock Option Awards

Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those options are determined by the Administrator and specified in the individual award agreements; generally have a contractual term of 10 years (5 years for ISOs granted to 10% stockholders); and are generally able to be terminated 3 - 12 months after the termination of service.

The fair value of each option is estimated on the date of grant using the Black-Scholes option valuation model that uses assumptions in the following tables. Because Black-Scholes option valuation models incorporate ranges of assumptions for inputs, these ranges are disclosed. Expected volatilities are primarily based on historical volatilities of peer group companies as the Company has limited history as a public company. The Company uses the simplified approach to estimate option exercise term. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

In applying the Black-Scholes option pricing model to the options issued, the Company used the following assumptions:

 SCHEDULE OF BLACK-SCHOLES OPTION PRICING MODEL TO THE OPTIONS ISSUED

Below is a table summarizing the changes in stock options outstanding during the years ended December 31, 2025 and 2024:

SCHEDULE OF ACTIVITY OF STOCK OPTIONS

The weighted average grant date fair value of options granted during the years ended December 31, 2025 and 2024 was $3.71 and $1.17, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025 and 2024 was $0 and $0, respectively.

Stock-based compensation expense for options of $569,818 and $105,817 was recorded during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the remaining unrecognized compensation cost related to non-vested options is $419,725.

As of December 31, 2025, the outstanding stock options have a weighted average remaining contractual life of 7.7 years and a total intrinsic value of $0.

Restricted Stock Awards

During 2025, the Company granted 15,898,579 restricted stock awards to employees and directors with various vesting terms ranging from immediate vesting to vesting over four years. The weighted-average grant date fair value was $1.08 per share, determined by the Company’s closing stock price on the respective grant dates.

A summary of the status of the Company’s nonvested restricted stock awards as of December 31, 2025, and changes during the year then ended is presented below:

 SCHEDULE OF NONVESTED RESTRICTED STOCK AWARDS

The total fair value of restricted stock awards that vested during the year ended December 31, 2025 was $189,058.

During 2025, the Company recognized stock-based compensation expense of $1,789,105 related to RSAs. As of December 31, 2025, unrecognized compensation cost was $15,186,700 expected to be recognized over a weighted-average period of 3.0 years.