Stock Option Plans

2018 Stock Option Plan

In 2018, the Board authorized the Stock Option Plan (which may be referred to as the “2018 Plan”). 2,000,000 shares of our common stock were originally reserved to be issued under the Plan and in July 2024, the Board amended the 2018 Plan to decrease the shares reserved to 1,508,934. As of December 31, 2025, no options were available for grant under the 2018 Plan and 1,508,934 shares of our common stock were outstanding under the 2018 Plan subject to option exercise by the holders.

2024 Stock Option Plan

In 2024, the Board authorized a new Stock Option Plan (which may be referred to as the “2024 Plan”). 891,066 shares of our common stock were reserved to be issued under the 2024 Plan, which provides for the grant of shares of stock options to employees, non-employee directors, and non-employee consultants. As of December 31, 2025, 697,816 options to purchase shares of our common stock were available for grant and 193,250 shares of our common stock were outstanding under the 2024 Plan subject to option exercise by the holders and vesting restrictions.

2025 Omnibus Incentive Plan

In September 2025, the Board authorized 2025 Omnibus Plan (which may be referred to as the “2025 Plan”). 3,000,000 shares of our common stock were reserved to be issued under the 2025 Plan, which provides for the grant of shares of stock options, restricted stock units and other equity-based instruments to employees, directors, non-employee directors and consultants among others. As of December 31, 2025, 2,720,000 shares of our common stock were available for grant and 240,000 shares of our common stock were outstanding under the 2025 Plan subject to option exercise by the holders and vesting restrictions.

The following table summarizes option activity for the years ended December 31, 2025 and 2024:

Stock-Based Compensation Expense

We use the Black-Scholes option pricing model with the following assumptions to estimate the stock-based compensation expense:

The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of our employee stock options.

The dividend yield assumption for options granted is based on our history and expectation of dividend payouts. We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future.

Due to lack of historical exercise data, the expected holding period for employee stock options is calculated using the simplified method which takes into consideration the contractual life and vesting terms of the options.

We determined the expected volatility assumption for options granted using the historical volatility of comparable public companies’ stock. We will continue to monitor peer companies and other relevant factors used to measure expected volatility for future stock option grants, until such time that our common stock has enough market history to use historical volatility. Forfeitures are recognized as incurred.

Stock option expense for the years ended December 31, 2025 and 2024, was approximately $0.32 million and $0.35 million, respectively. The stock-based compensation expense is recognized as period cost in general and administrative expenses. As of December 31, 2025, the unrecognized stock-based compensation expense was $1.4 million, which is expected to be recognized over a period of approximately 3.42 years.

Restricted Stock Units

RSUs granted to directors under the plans generally vest over one year. The number of shares issued on the date the RSUs vest is net of the minimum statutory tax withholdings, which are paid in cash to the appropriate taxing authorities. We recognize the stock-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period.

The following table summarizes RSU activity during the years ended December 31, 2025 and 2024:

As of December 31, 2025 and 2024, unrecognized stock-based compensation expense related to RSUs was $0.3 million and $0, respectively. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 0.75 years as of December 31, 2025.

Stock-based compensation expense for the years ended December 31, 2025 and 2024, was $0.1 million and $0, respectively. The stock-based compensation expense is recognized as period costs in general and administrative expenses.

No RSUs vested during the years ended December 31, 2025 and 2024.