| STOCK-BASED COMPENSATION |
Note
13. STOCK-BASED COMPENSATION
Under
the Company’s 2024 Equity Incentive Plan (the “2024 Plan”), the Company is authorized to grant options or restricted
stock for up to 1,000,000 shares of Common Stock. On April 30, 2026, at the Company’s annual meeting of shareholders, the Company’s
shareholders approved an amendment to the 2024 Plan to increase the number of shares of Common Stock authorized for issuance under the
2024 Plan from 66,666 shares to 1,000,000 shares. Options or restricted stock awards may be granted to employees, the Company’s
board of directors, and external consultants who provide services to the Company. The Company’s 2024 Plan was approved at the Annual
Meeting of Shareholders on June 4, 2024.
The
Company has recorded stock-based compensation expense related to the issuance of restricted stock awards in the following line items
in the accompanying condensed consolidated statements of operations:
SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION AWARDS
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
Three Months Ended
June 30, | | |
Six Months Ended
June 30, | |
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
| | |
| | |
| | |
| |
| Research and development | |
$ | 17,780 | | |
$ | (8,334 | ) | |
$ | 18,854 | | |
$ | 12,916 | |
| General and administrative | |
| 767,161 | | |
| 219,941 | | |
| 780,427 | | |
| 525,307 | |
| Total stock-based compensation
expense | |
$ | 784,941 | | |
$ | 211,607 | | |
$ | 799,281 | | |
$ | 538,223 | |
The
following table summarizes stock option activity under the 2014 Plan and 2024 Plan:
SUMMARY OF OPTION ACTIVITY
| | |
Number of
options | | |
Weighted-average
exercise price | | |
Weighted-average
remaining contractual
term (in years) | | |
Aggregate
intrinsic value | |
| Outstanding at December 31, 2025 | |
| 9,055 | | |
$ | 211.56 | | |
| 3.67 | | |
| — | |
| Granted | |
| 343,780 | | |
| 1.59 | | |
| 9.94 | | |
| — | |
| Exercised | |
| — | | |
| — | | |
| — | | |
| — | |
| Forfeited | |
| — | | |
| — | | |
| — | | |
| — | |
| Outstanding at June 30, 2026 | |
| 352,835 | | |
$ | 6.98 | | |
| 9.76 | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Vested and exercisable at June 30, 2026 | |
| 352,835 | | |
$ | 6.98 | | |
| 9.76 | | |
| — | |
As
of June 30, 2026, there was no unrecognized compensation cost related to unvested stock options.
The
following table summarizes restricted stock award activity under the 2014 Plan and 2024 Plan:
SUMMARY OF RESTRICTED STOCK AWARD
| | |
| | |
| | |
| | |
As of June 30, 2026 | |
| | |
Number of restricted
stock awards
(RSA) | | |
Weighted-
average
grant price | | |
FMV on
grant date | | |
Vested
number
of RSA | | |
Unvested
number
of RSA | |
| Balance at December 31, 2025 | |
| 51,810 | | |
$ | 51.87 | | |
$ | 2,709,982 | | |
| 47,951 | | |
| 3,859 | |
| Granted | |
| 161,055 | | |
| 1.56 | | |
| 251,246 | | |
| 161,055 | | |
| — | |
| Forfeited | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Balance at June 30, 2026 | |
| 212,865 | | |
$ | 13.91 | | |
$ | 2,961,228 | | |
| 209,006 | | |
| 3,859 | |
During
the six months ended June 30, 2026, the Company issued restricted stock awards (“RSAs”) for 161,567 shares of Common Stock
to employees, non-employees, and the board of directors. The shares vested immediately. During the six months ended June 30, 2026, 512
shares vested from RSAs granted prior to January 1, 2026, and 161,055 shares vested from RSAs granted during the six months ended June
30, 2026.
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