NOTE 14. STOCK COMPENSATION

Equity Incentive Plan

On April 29, 2025, the Company’s Board of Directors and stockholders approved the 2025 Equity Incentive Plan (the “2025 Plan”). The Compensation Committee of the Board of Directors has the authority to administer the 2025 Plan and to determine the recipients and terms of awards granted thereunder. The 2025 Plan provides for the issuance of up to 4,000,000 shares of the Company’s common stock to employees, directors, and consultants.

Restricted Stock Unit

Following the Company’s initial public offering on November 14, 2025, the Company granted restricted stock units (“RSUs”) to employees and contractors under the 2025 Plan. The vesting terms of these awards range from immediate vesting to five years, and more than 50% of the awards include performance-based conditions. The fair value of RSUs is determined based on the Company’s stock price on the grant date.

During the six months ended June 30, 2026, the Company recognized $3.5 million of stock-based compensation expense related to RSUs and issued 200,000 shares of common stock upon the settlement of vested restricted stock units. No stock-based compensation expense was recognized during the six months ended June 30, 2025.

A summary of RSU activity is as follows:

 SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY

The Company had no restricted stock units outstanding and no restricted stock unit activity during the six months ended June 30, 2025, as the Company’s 2025 Equity Incentive Plan had not yet been adopted.

As of June 30, 2026, 470,000 RSUs had vested, all of which had been settled through the issuance of shares of common stock, including 200,000 shares issued during the six months ended June 30, 2026.

Stock Options

During the six months ended June 30, 2026, the Company granted 10,000 stock options, all of which vested immediately. The fair value of these options was determined using the Black-Scholes option pricing model, and the related compensation expense was recognized in full on the grant date. The impact of these options was not material to the Company’s condensed consolidated financial statements.

Equity Issued for Services

During the six months ended June 30, 2026, the Company entered into multiple consulting and service arrangements with third-party providers. As consideration for services, the Company issued shares of its common stock upon execution of the respective agreements. These shares were not subject to vesting conditions and were deemed fully earned upon issuance.

The Company measured these awards at the grant-date fair value of its common stock. As the awards were not subject to substantive future service requirements, the total fair value of the equity consideration was recognized as share-based compensation expense on the respective grant dates.

During the six months ended June 30, 2026, the Company issued an aggregate of 185,120 shares to nonemployees for services, resulting in total share-based compensation expense for the period of $0.5 million.