NOTE 10 – Equity Based Compensation

On December 13, 2023, the Board of Directors approved the American Picture House Corporation 2023 Directors, Employees and Advisors Stock Incentive and Compensation Plan (the “2023 Plan” or the “Plan”) to promote the financial success and progress of the Company and to provide equity-based incentives to directors, officers, employees and advisors. The 2023 Plan is administered by the Board of Directors and authorizes the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards.

Under the 2023 Plan, the total number of shares of common stock that may be issued pursuant to awards is limited to twenty percent (20%) of the Company’s issued and outstanding common shares at the time of grant, subject to adjustment in the event of stock splits, stock dividends and other similar events. Unless the Board of Directors determines otherwise, stock options granted under the 2023 Plan must have an exercise price of not less than the fair value of the Company’s common stock on the date of grant. The aggregate fair value of incentive stock options that first become exercisable by any optionee in any calendar year shall not exceed $100,000.

The Board of Directors determines the terms and conditions of awards granted under the 2023 Plan, including vesting and exercisability provisions. Vesting requirements for awards may be time-based or event-based and vary by individual grant. Stock options granted under the 2023 Plan expire on the date determined by the Board of Directors, but in no event may the term exceed ten years. Incentive stock options and non-qualified stock options generally become exercisable over a two-year period unless otherwise determined by the Board of Directors. Vested and unexercised options may generally be exercised for up to three months following termination of employment or service, or such longer period as may be determined by the Board of Directors.

In November 2024, the Company’s stockholders approved an increase in the number of shares issuable under the 2023 Plan, permitting the Board of Directors to grant additional awards to management and advisors. Awards under the 2023 Plan remained subject to the overall limitation of twenty percent (20%) of the Company’s issued and outstanding common shares at the time of grant.

On February 8, 2024, the Board of Directors granted options under the 2023 Plan to purchase an aggregate of 5,083,471 shares of the Company’s common stock at an exercise price of $0.0125 per share. These options were fully vested upon grant and have a term of ten years. During 2024, 500,000 of these options were forfeited upon the resignation of certain directors.

On November 21, 2024, the Board of Directors granted options under the 2023 Plan to purchase an aggregate of 5,569,967 shares of the Company’s common stock at an exercise price of $0.29 per share. These options had not vested as of December 31, 2024.

During the year ended December 31, 2024, the Company recognized stock-based compensation expense of $1,258,159 related to option awards under the 2023 Plan, which was included in general and administrative expenses. The aggregate grant-date fair value of the 5,083,471 options granted on February 8, 2024 was $1,258,159, or approximately $0.25 per option, as measured in accordance with ASC 718, Compensation-Stock Compensation. Of the February 8, 2024 option grants, option awards with a grant-date fair value of $250,000 were granted to Bannor Michael MacGregor in exchange for his agreement to forgo compensation. Because the 5,569,967 options granted on November 21, 2024 had not vested as of December 31, 2024, no compensation expense was recognized for those awards as of that date.

During 2025, the Company did not grant any additional options. During 2025, an aggregate of 6,319,967 options held by an officer, directors, advisors and consultants were forfeited at a weighted-average exercise price of $0.2570, leaving 3,833,471 options outstanding at a weighted-average exercise price of $0.0125 as of December 31, 2025.

During the year ended December 31, 2025, the Company recognized stock-based compensation expense of $379,065 related to option awards under the 2023 Plan, compared to $1,258,159 for the year ended December 31, 2024. Stock-based compensation expense is included within general and administrative expenses in the consolidated statements of operations.

A summary of stock option activity under the 2023 Plan for the year ended December 31, 2025 is presented below:

 Schedule of Stock Option Activity