NOTE 6. STOCK BASED AWARDS

Stock-based compensation expense of $194 and $117 for the three months ended June 30, 2026 and 2025, respectively, and $320 and $235 for the six months ended June 30, 2026 and 2025, respectively, was reported in the condensed consolidated statements of operations within general and administrative expenses.

Stock Options

Under the 2017 Stock Incentive Plan (“2017 Plan”), as amended, there are an aggregate of 775,000 shares authorized for issuance. On March 18, 2026, the Company’s Board of Directors approved the 2026 Equity Incentive Plan (the “2026 Plan”). The shareholders approved the 2026 Plan on May 13, 2026. The 2026 Plan succeeded the Company’s 2017 Plan and authorized 250,000 shares for various equity- and cash-based awards. The remaining available shares under the 2017 Plan are now available for issuance under the 2026 Plan. As of June 30, 2026, there were 253,890 remaining authorized shares available for grant under the 2026 Plan.

During the six months ended June 30, 2026, the Company granted 30,000 stock options under the 2017 Plan which vest over 5 years and granted 60,800 stock options under the 2026 Plan which vest over 1-5 years. Weighted average stock option fair value assumptions and the weighted average grant date fair value of stock options granted were as follows:

   SCHEDULE OF WEIGHTED AVERAGE GRANT DATE FAIR VALUE OF STOCK OPTIONS GRANTED 

Total compensation expense related to stock options was $151 and $69 for the three months ended June 30, 2026, and 2025, respectively. Total compensation expense related to stock options was $228 and $123 for the six months ended June 30, 2026, and 2025, respectively. As of June 30, 2026, there was $990 of unrecognized compensation related to stock options which will be recognized over a weighted average period of 2.0 years.

Following is a summary of stock option activity as of and for the six months ended June 30, 2026 and 2025:

 SCHEDULE OF OPTION ACTIVITY 

Restricted Stock Units

Total compensation expense related to restricted stock units (“RSUs”) was $43 and $48 for the three months ended June 30, 2026 and 2025, respectively. Total compensation expense related to restricted stock units (“RSUs”) was $92 and $112 for the six months ended June 30, 2026 and 2025, respectively. During the three- and six- month periods ended June 30, 2025, we granted 43,664 RSUs at an average grant price per share of $8.73 to non-employee directors which vest over two years. As of June 30, 2026, total unrecognized compensation expense related to the outstanding RSUs was $134, which will vest over a weighted average period of 1.0 years. On March 18, 2026 these RSU’s were modified to allow full vesting upon a change of control, as defined in the amendment. Management concluded that no incremental compensation cost was required, as the added change-in-control provision did not impact the fair value of the awards at the modification date.

Following is a summary of RSU activity as of and for the six months ended June 30, 2026 and 2025:

SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY