12. EQUITY-BASED COMPENSATION

Restricted Stock Units

In December 2025, the Company granted 2,431,385 restricted stock units to executives of the Company and 834,164 restricted stock units to its board members. These restricted stock units have vesting periods over the next three years.

In February 2026, the Company granted 100,000 shares restricted stock units to a consultant that vests over 18 months.

Restricted stock unit activity as of and for the periods below was as follows

 SCHEDULE OF NONVESTED RESTRICTED STOCK UNITS ACTIVITY

The Company recognized approximately $148,000 and $0 in equity-based compensation on restricted stock units for the three months ended March 31, 2026 and 2025, respectively.

Shares of Restricted Stock

In 2025, employees and contractors were granted a total of 615,405 shares of restricted stock. The restricted stock award vested 100% on December 13, 2025.

In March 2026, the Company awarded 53,024 shares of restricted stock to a consultant that vested 100% immediately.

SCHEDULE OF SHARES RESTRICTED STOCK UNITS ACTIVITY

Total equity-based compensation expense related to shares of restricted stock issuances was approximately $12,000 and $0 for the three months ended March 21, 2026 and 2025, respectively.

Stock Options

Stock option activity as of and for the periods below was as follows:

 SCHEDULE OF STOCK OPTION ACTIVITY

Equity-based compensation expense totaling $0 has been recognized relating to these stock options during the three months ended March 31, 2026 and 2025.

Warrants

As disclosed in Note 12, 13,043 warrants were granted in March 2024 to our financial advisor and placement agent in connection with our offering and sale of Series B Preferred Stock. In 2024, the Company issued 32,175 warrants in connection with the 2024 Convertible Notes described in Note 10.

In March 2025, 699,204 warrants were granted with the sale of Series C Preferred Stock and 380,435 were granted with the issuance of Series D Preferred Stock. See Note 11.

Warrant activity as of and for the periods below was as follows:

 SCHEDULE OF WARRANTS

The Company uses the Black-Scholes option-pricing model to estimate the fair value of equity-based awards. The inputs for the Black-Scholes valuation model require management’s significant assumptions. Prior to the Company’s IPO, the price per share of common stock was determined by the Company’s board based on recent prices of common stock sold in private offerings. Subsequent to the IPO, the price per share of common stock is determined by using the closing market price on the New York Stock Exchange on the grant date. The risk-free interest rate is based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal to the expected life at the grant date. The expected term for employee and non-employee awards ranged from 5 to 10 years based on industry data, vesting period, contractual period, among other factors. The expected volatility was estimated based on historical volatility information of the Company. The Company does not expect to pay dividends. For awards with a performance condition, stock compensation is recognized over the requisite service period if it is probable that the performance condition will be satisfied.