NOTE 6. STOCK-BASED COMPENSATION

In connection with the Closing, the Company adopted the Tevogen Bio Holdings Inc. 2024 Omnibus Incentive Plan (the “2024 Plan”) and no longer grants awards pursuant to the 2020 Equity Incentive Plan (the “2020 Plan”). Each restricted stock unit (“RSU”) award granted under the 2020 Plan that was outstanding and unvested as of the Closing Date was automatically canceled and converted into an award under the 2024 Plan with respect to the common stock of the Company (the “Rollover RSUs”). Such Rollover RSUs remain subject to the same terms and conditions as set forth under the applicable award agreement prior to the Closing.

In addition to covering the Rollover RSUs, under the 2024 Plan, as of December 31, 2024, the Company was authorized to grant awards up to an aggregate 800,000 shares of common stock. During the year ended December 31, 2025, the number of shares authorized under the 2024 Plan was increased to 977,991. The 2024 Plan provides for the grant of options, stock appreciation rights, restricted common stock (“Restricted Stock”), RSUs, and other equity-based awards. As of March 31, 2026, awards for 189,398 shares remained available to be granted under the 2024 Plan.

The Company has issued RSUs that are subject to either service-based vesting conditions or service-based and performance-based vesting conditions. Compensation expense for service-based RSUs is recognized on a straight-line basis over the vesting period of the award. Compensation expense for service-based and performance-based RSUs (“Performance-Based RSUs”) is recognized when the performance condition, which is based on a liquidity event condition being satisfied, is deemed probable of achievement. The fair value of RSUs vested during the three months ended March 31, 2026 and 2025 was $0.3 million and $7.8 million, respectively.

On June 27, 2025, the Company issued an aggregate of 185,000 shares of Restricted Stock under the 2024 Plan to the Company’s executive officers, including a grant of 160,000 shares of Restricted Stock to Dr. Saadi. The shares of Restricted Stock granted to Dr. Saadi will vest in four equal annual installments beginning on June 27, 2032 and the shares of Restricted Stock granted to each other grantee will vest in three equal annual installments beginning on June 27, 2030 (the “RSA Vesting Period”), subject in each case to the applicable grantee’s continuous service with the Company through the vesting date, and provided that the shares will automatically vest in full in the event of termination due to death or disability. Pursuant to the terms of these awards, the Company’s executive officers are entitled to vote the Restricted Stock, but the shares may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, subject to automatic forfeit. The Company’s executive officers will automatically forfeit all unvested Restricted Stock in the event they depart the Company for any reason, unless termination of their service triggers accelerated vesting pursuant to the terms of the applicable award agreement or the 2024 Plan. The fair value per share for these awards was determined to be $62 per share, equivalent to the Company’s stock price on the grant date, resulting in a total grant date fair value of $11,470,000. In accordance with ASC 718, the Company will recognize compensation expense on a straight-line basis from the grant date until the completion of the RSA Vesting Period.

Restricted Stock and RSU activity was as follows:

 SCHEDULE OF RESTRICTED STOCK AND RSU ACTIVITY

There was $2,669,557 of compensation cost related to shares of service-based Restricted Stock and service-based RSUs during the three months ended March 31, 2026. There was $81,181,796 of unrecognized compensation cost related to shares of service-based Restricted Stock and service-based RSUs as of March 31, 2026, which will be expensed over a weighted average period of 8.2 years. There was $180,035 of compensation cost related to Performance-Based RSUs during the three months ended March 31, 2026. There was $926,353 of unrecognized compensation cost related to Performance-Based RSUs as of March 31, 2026, which will be expensed over a weighted average period of 1.3 years.

The Company recorded stock-based compensation expense in the following expense categories in the accompanying unaudited consolidated statements of operations:

 SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE