7. SHARE-BASED COMPENSATION

In 2014, the Company adopted the Long‐Term Stock Incentive Plan (the “2014 Plan”). No further awards may be granted under the 2014 Plan. As of June 30, 2026, a total of 195,699 shares were reserved for issuance upon the exercise of outstanding options previously granted under the 2014 Plan.

In 2021, the Board adopted the Equity Incentive Plan (the “2021 Plan”), which authorizes the award of stock options, restricted stock awards, stock appreciation rights, RSUs, performance awards, cash awards, and stock bonus awards. As of June 30, 2026, a total of 2,590,765 shares were reserved for issuance under the 2021 Plan, including 1,870,277 shares available for future awards.

The general purpose of the 2014 Plan and the 2021 Plan is to allow the Company to attract and motivate key employees and directors to align their interests with those of the Company’s shareholders.

Stock Option Awards

For the three and six months ended June 30, 2026 and 2025, the grant date fair value of all option grants was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted-average assumptions:

The value of stock options is recognized as compensation expense using the straight-line method over the vesting period. Unrecognized compensation costs related to non‐vested options at June 30, 2026 amounted to $195,116, which is expected to be recognized over a weighted average term of 3.32 years.

Stock option activity is summarized as follows for the six months ended June 30, 2026:

In the three months ended June 30, 2026, the Company granted 125,000 stock options to board members. These stock options vested immediately and have an exercise price of $3.05 per share. The Company also granted 125,000 stock options to employees. These stock options vest equally over four years and have an exercise price of $6.00. 

Restricted Stock Unit Awards

The RSUs are subject to the recipient’s continued service through the applicable vesting date(s). Unrecognized compensation cost related to non‐vested RSUs at June 30, 2026 amounted to $108,362 which is expected to be recognized over a weighted average term of 0.78 years.

The fair value of each RSU was estimated on the date of grant, based on the weighted average price of the Company's stock.  The Company will issue new shares of common stock to satisfy RSUs upon vesting.  The following table summarizes the RSU activity and weighted averages for share-based awards granted under the terms of the 2021 Plan:

Share-Based Compensation Expense

Pursuant to awards made under the 2014 Plan and the 2021 Plan, the Company recorded share-based compensation expense in the following expense categories in the unaudited interim condensed consolidated statements of operations for the three months ended June 30, 2026 and 2025:

No income tax benefits have been recognized in the unaudited interim condensed consolidated statements of operations for share-based compensation arrangements, and no share-based compensation costs have been capitalized as property and equipment through June 30, 2026.