NOTE 15 – EQUITY COMPENSATION

2025 Equity Incentive Plan

As of June 30, 2026 there were, respectively, 717,804 shares of common stock available for issuance pursuant to future stock or option grants under the 2025 Plan.

Stock-based compensation costs recognized under the plan are recorded as selling, general and administrative expenses. Stock compensation costs for the three and six months ended June 30, 2026 were $134,297 and $345,419 respectively. There were no stock-based compensation expenses recognized under the plan for the periods ended three months or six months June 30, 2025.

As of June 30, 2026, there is no accrued stock compensation for awards earned and not granted. As of December 31, 2025, the Company had accrued $736,563 in respect of accrued stock bonuses and restricted stock / option awards to be granted in 2026 under the 2025 Plan. During the first quarter of 2026, the equity awards related to the accrued expenses were granted and reclassified to equity.

Stock Options Issued and Outstanding

A summary of stock option activity during the six months ended June 30, 2026 is presented in the table below:

 SCHEDULE OF OPTION ACTIVITY 

The weighted average grant date fair value of the stock options granted during the six months ended June 30, 2026 and 2025 was $0.81 and $nil, respectively. The total fair value of stock options that vested during the six months ended June 30, 2026 and 2025 was 170,557 and nil, respectively.

The grant date fair value of the options granted was calculated using the Black-Scholes pricing model with the following assumptions: 66% volatility, risk free interest rate of 3.68% - 4.15%, an expected life of five years and no dividend.

Compensation costs associated with stock options represented $58,658 and $nil of the total share-based payment expense recorded in the three months ended June 30, 2026 and 2025, respectively. Compensation costs associated with stock options represented $194,781 and $nil of the total share-based payment expense recorded in the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was $299,280 of unrecognized stock-based compensation expense related stock options to be recognized over a weighted average period of 0.47 years.

Restricted Stock Awards

A summary of restricted stock awards during the six months ended June 30, 2026 is presented in the table below:

SUMMARY OF NON-VESTED STOCK OPTIONS ACTIVITY FOR EMPLOYEES AND CONSULTANTS 

The weighted average grant date fair value of the restricted stock granted during the six months ended June 30, 2026, was $2.78. The total fair value of restricted stock vested during the six months ended June 30 2026 was $733,241. There were no grants or award vesting during the six months ended June 30, 2025.

Compensation costs associated with restricted stock awards represented $75,639 and $nil of the total share-based payment expense recorded in the three months ended June 30, 2026 and 2025, respectively. Compensation costs associated with restricted stock awards represented $150,640 and $nil of the total share-based payment expense recorded in the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was $27,505 of unrecognized stock-based compensation expense related to restricted stock awards to be recognized over a weighted average period of 0.15 years.

Equity Interest Agreements

In connection with the acquisition of RPD, the Company entered into Equity Interest Agreements with certain key consultants to promote the continued development and growth of the acquired business. Under the terms of the agreements, the three consultants are eligible to earn an aggregate equity interest representing up to 25% of the RPD’s outstanding equity over a three-year vesting period, subject to the satisfaction of continued service conditions.

The Company accounts for these awards as share-based compensation in accordance with applicable accounting guidance. Compensation expense is recognized on a graded straight-line basis over the requisite service period based on the grant-date fair value of the awards. Share-based compensation expense recognized related to these awards was $29,068 and $59,169 for the three months ended June 30, 2026 and 2025 respectively, and $100,070 and $59,169 for the six months ended June 30, 2026, and 2025 respectively. As of June 30, 2026, 13% of the equity interests have vested.