Note 9 – Stock-Based Compensation

On April 12, 2023, the Company adopted the 2023 Equity Incentive Plan (the “2023 Plan”), which allows the issuance of up to 3,440,000 shares of the Company’s authorized and unissued common stock in the form of incentive stock options, non-qualified stock options, restricted stock units, performance share units, or other forms of equity as may be added in the future to employees, directors and consultants of the Company and its affiliates. The allowable number of shares that can be issued under the 2023 Plan increased upon the completion of the listing to 4,764,507 which represents 20% of the fully diluted capitalization of the Company on the closing of Company’s initial public price.

In January and February 2024, 2,460,000 and 200,000, respectively, shares of restricted stock were granted to the executive officers and members of the Board of Directors further to the 2023 Plan as described above. Of the total shares of restricted stock granted (tranche 1) 1,686,667 vest 100% seven months from the date that the Company lists on a national exchange, (tranche 2) 486,666 will vest in equal monthly instalments over a one (1) year period commencing on the eighth month from the effective date of the listing on a national exchange and (tranche 3) 486,666 are performance-based, the vesting of which will be predicated on certain financial and operational performance metrics being met after the effective date of the listing on a national exchange as set forth the grant agreements. Since tranche 3 is performance based, management has determined that it is not yet probable that all of the performance vesting conditions will be met and as such no expense has been recognized for tranche 3 as of June 30, 2026.

On October 23, 2024, 200,000 shares of restricted stock were granted to each of the CEO and the Executive Chairman, for a total of 400,000, and 100,000 granted to two members of the Board of Directors were canceled. These shares of restricted stock vest 100% seven months from the date the Company lists on a national exchange.

On March 26, 2025, 150,000 shares of restricted stock were granted to the three board members, in the amount of 50,000 each. These shares of restricted stock vest 100% seven months from the date the Company lists on a national exchange.

Prior to March 26, 2025, the Company determined that no expense should be recognized for the shares of restricted stock since the contingency related to the commencement of vesting (i.e., the listing) of the shares of restricted stock had not been met. On March 26, 2025, the listing occurred, satisfying the contingency required for vesting to begin and defining the service period.

On June 1, 2025, 300,000 shares of restricted stock were forfeited resulting in a reversal of $1,329,062 of shared based compensation during the year ended December 31, 2025.

On June 5, 2025, 200,000 shares of restricted stock were granted to the one board member. 66,667 shares of restricted stock vest 100% seven months from the date of issuance, 66,667 shares of restricted stock vest 100% thirty-six months from the date of issuance. The remaining 66,666 shares of restricted stock vest thirty-six months from the date certain performance metrics are achieved.

On September 24 and 25, 2025, 50,000 shares of restricted stock were granted to the five board members or advisors; of which 25,000 shares of restricted stock were vested immediately, remaining vest evenly over ten months after two-month delay.

On November 6, 2025, 1,200,000 shares of restricted stock were granted to the CEO, 15,000 to the Chair of the Scientific Advisory Board, and 70,000 to an employee of the Company. 600,000 of the shares of restricted stock issued to the CEO will vest January 2, 2026 and the remaining vest evenly over twelve months commencing January 2, 2026. Of the 85,000 shares of restricted stock issued to the advisors, 42,500 will vest immediately and the remaining vest evenly over ten months commencing January 2026.

On March 12, 2026, 170,000 shares of restricted stock were granted to the Chief Accounting Officer; of which 53,333 shares of restricted stock vested immediately upon grant, 58,333 shares of restricted stock vest on the first anniversary of the grant date, and 58,334 shares of restricted stock are performance-based. Since the performance-based tranche is subject to performance vesting conditions, management has determined that it is not yet probable that the performance vesting conditions will be met, and as such no expense has been recognized for this tranche as of June 30, 2026.

In April 2026, the Company’s Board of Directors approved the acceleration of vesting for certain outstanding unvested shares of restricted stock previously granted to employees, directors, and scientific advisory board members, such that 734,356 shares that would otherwise have vested on their original vesting schedules vested immediately on April 30, 2026. The accelerated shares related to awards originally granted on July 12, 2024, June 5, 2025, September 25, 2025, and November 6, 2025. The acceleration was accounted for as a modification under ASC 718-20. Based on the $4.30 closing stock price on April 30, 2026, the Company recognized stock-based compensation expense of $4,781,116 related to the accelerated shares during the three and six months ended June 30, 2026, representing the previously unrecognized compensation cost associated with the original awards that was accelerated into the period.

As of June 30, 2026, 249,507 shares of restricted stock remained available for future issuance under the 2023 Plan.

The Company determined the fair value of restricted stock granted during the three and six months ended June 30, 2026 to be $0 and $1,599,700, respectively, and $1,498,000 and $3,314,500 during the three and six months ended June 30, 2025, respectively, based on the price of the most recent sale of common stock prior to each grant date for those shares of restricted stock granted prior to the listing date, or the quoted market value on the date of issuance for those shares of restricted stock granted after the listing date. For the three and six months ended June 30, 2026, the Company recognized $5,651,913 and $8,384,311, respectively, of stock-based compensation expense, and for the three and six months ended June 30, 2025, the Company recognized $3,526,076 and $20,923,850, respectively, of stock-based compensation expense, which is included in the condensed consolidated statements of operations. As of June 30, 2026, there was unamortized stock-based compensation of approximately $409,923, which the Company expects to recognize over approximately 1 year. The increase in stock-based compensation expense for the three and six months ended June 30, 2026 as compared to the corresponding prior year periods is primarily attributable to the acceleration of vesting described above.

The activity related to restricted stock during the six months ended June 30, 2026 is summarized as follows:

During the three and six months ended June 30, 2026, the Company withheld 382,573 and 776,777 shares of common stock, respectively, from recipients upon restricted stock vesting in order to cover their tax liabilities associated with such vesting events, including shares vested in connection with the acceleration described above. The fair value of the shares withheld at the respective vesting dates of $1,844,020 and $5,215,432, respectively, is reflected as a treasury stock transaction. As of June 30, 2026 and December 31, 2025, the Company had not remitted the income taxes on behalf of the recipients, and therefore $9,452,272 and $2,769,482, respectively, is included in accrued restricted stock tax withholding obligations in the accompanying condensed consolidated balance sheets, which includes accrued interest and penalties of $1,530,535 and $578,974, respectively, related to such unremitted amounts.

The Company is actively evaluating and implementing measures intended to remit the outstanding withholding tax obligations to the applicable taxing authorities as soon as practicable.