NOTE 15 - STOCK-BASED COMPENSATION

The Company created the 2023 Equity Incentive Plan (the “Plan”) on April 27, 2023, under which stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and other stock-based awards became available for issuance not to exceed 1,500,000. On November 6, 2025, the Board of Directors resolved to increase the share pool under the Plan to 7,000,000 shares. The Plan is designed to attract, retain, and motivate key employees. Currently, the fair value is recognized as an expense over the vesting period of the award. Options are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant, vest over a four-year period, and expire after five or ten years. There are certain situations that may accelerate the vesting or termination of all outstanding options, such as a change in control. Vesting of RSUs awarded to employees may be time or performance-based. As of June 30, 2026, 1,523,552 shares were available for grant under the Plan. The compensation expense related to stock-based awards is included in general and administrative expenses with a corresponding increase to additional paid-in capital.

The following table summarizes the option activity during the six months ended June 30, 2026:

 SCHEDULE OF SHARE OPTIONS OUTSTANDING

The following table summarizes the nonvested share options for the six months ended June 30, 2026 and activity during the six months ending June 30, 2026:

 SCHEDULE OF NONVESTED SHARE OPTION

The aggregate intrinsic value represents the excess, if any, of the Company’s common stock price over the exercise price of in-the-money options as of the applicable reporting date. The stock prices used were $2.63 and $0.429 as of December 31, 2025 and June 30, 2026, respectively.

As of June 30, 2026, there was $3,393,054 unrecognized compensation expense related to nonvested stock options to be recognized through June 30, 2028. Total compensation expense related to stock options during the three and six months ended June 30, 2026 and 2025 was $239,268 and $480,478, and $244,883 and $489,766, respectively.

The following table summarizes the restricted stock units (“RSUs”) outstanding as of June 30, 2026 and activity during the six months ended June 30, 2026:

 SCHEDULE OF RESTRICTED STOCK UNITS OUTSTANDING

During the six months ended June 30, 2026, 3,278,103 RSUs of shares were issued under the plan to employees with a total fair value of $2,370,750, based on grant date fair value. Of those shares, 1,835,641 vest and are expensed on a straight line basis over a period of three months to four years. There were 102,492 shares vested and 101,886 canceled during the three months ended June 30, 2026. Total compensation expense related to time-based RSUs during the three and six months ended June 30, 2026 and 2025 was $409,357 and $922,539, and $0 and $0, respectively.

During the six months ended June 30, 2026, the remaining 1,442,462 shares vest over terms up to 3 years upon the satisfaction of certain operational goals specified in the underlying agreements. Compensation expense for these performance-based restricted stock units is recognized in accordance with ASC 718 over the requisite service period, when achievement of the performance condition is considered probable. The Company reassesses the probability of achieving such performance conditions at each reporting period and adjusts compensation expense accordingly. To the extent applicable, compensation cost is recognized using an accelerated attribution method for awards with graded vesting features. There were 36,679 performance-based restricted stock units canceled during the six months ended June 30, 2026. Total compensation expense related to performance-based RSUs during the three and six months ended June 30, 2026 and 2025 was $73,164 and $308,895, and $0 and $0, respectively.

As of June 30, 2026, there was $4,686,018 unrecognized compensation expense related to nonvested RSUs to be recognized through June 30, 2030.