NOTE 12 – WARRANTS AND STOCK OPTIONS

The Company grants, to certain of its directors and employees, warrants and stock options to purchase shares of the Company’s equity. The Company may also issue stock options or warrants to investors in connection with its capital raising and financing activities. In addition, the Company has adopted, and its shareholders have approved the 2023 Plan. Under the 2023 Plan, a total of 7,500,000 shares of the Company’s Common Stock are reserved for awards to directors, officers, employees and consultants. Incentive-compensation awards under the 2023 Plan may consist of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards.

Following is a summary of the warrant and stock options activities during the three and six months ended June 30, 2026 and 2025:

 SUMMARY OF WARRANT AND STOCK ACTIVITIES 

During the six months ended June 30, 2026, the Company issued and / or granted a total of 34,443,250 warrants and stock options, with (i) warrants exercisable to acquire 5,000,000 shares of Common Stock issued under the terms of the transaction documents for the June 2026 sale lease-back transaction involving the DST Property, (ii) 21,562,500 common warrants and 4,410,000 pre-funded warrants issued as part of the March 2026 offering to finance the construction of multi-seasonal amphitheaters, and (iii) 3,470,750 stock options granted to employees and directors.

During the six months ended June 30, 2025, the Company issued and / or granted a total of 4,297,500 warrants and stock options with (i) 2,500,000 stock options granted to JW Roth and a significant shareholder of the Company in connection with the closing upon the real property in McKinney, (ii) 900,000 warrants issued to investors as part of the convertible promissory note offering effected in the six months ended June 30, 2025, (iii) an additional 465,000 in total warrants and options for contributed services and (iv) 432,500 to employees and directors.

As of June 30, 2026, there was a total of 39,492,927 warrants and stock options exercisable with an aggregate intrinsic value of $875,475. For the total warrants and stock options outstanding of 44,180,367 as of June 30, 2026, the aggregate intrinsic value was $880,362. As of June 30, 2026, there was $12,524,647 of unrecognized compensation cost related to non-vested warrants.

NOTE 12 – WARRANTS AND STOCK OPTIONS (Continued)

As of December 31, 2025, there was a total of 7,456,264 warrants and stock options exercisable with an aggregate intrinsic value of $12,303,982. For the total warrants and stock options outstanding of 9,752,617 as of December 31, 2025, the aggregate intrinsic value was $14,329,214. As of December 31, 2025, there was $6,508,123 of unrecognized compensation cost related to non-vested warrants.

The equity-based compensation cost, related to warrants and stock options, are included as a charge to operating expenses in the Unaudited Condensed Consolidated Statements of Operations. The equity-based compensation cost totaled $1,782,521 and $3,738,453 for the three and six months ended June 30, 2026, respectively, and $1,883,762 and $13,224,382 for the three and six months ended June 30, 2025, respectively. As of June 30, 2026 and 2025, the equity-based compensation cost is expected to be recognized over a weighted-average period of 4.87 years and 4.63 years, respectively.

Monte Carlo Stock Options

On January 20, 2026, the Board of Directors approved the grant of 3,000,000 stock options to the Company’s Chairman and CEO. The stock options become exercisable only upon the Company’s Common Stock achieving certain price milestones within five years of the date of grant. If, at any time prior to January 30, 2031, the closing sales price of the Company’s Common Stock (as reported on the NYSE American (or other stock exchange or principal trading market where the Company’s Common Stock is then listed or quoted)) achieves the following thresholds a portion of the options will vest based on the following schedule. Once vesting occurs for each tranche of 1,000,000 options, such tranche will be exercisable for five years from the date of vesting.

 SCHEDULE OF OPTIONS VESTED SUBJECT TO TRANCHE 

Fair Value Assumptions

We estimate the fair value of warrants and stock options with service conditions on the grant date using the Black-Scholes-Merton model. The weighted-average assumptions used in the Black-Scholes-Merton model are as follows:

SCHEDULE OF FAIR VALUE OF WARRANTS AND OPTION  

NOTE 12 – WARRANTS AND STOCK OPTIONS (Continued)

We estimate the fair value of stock options with market performance conditions on the grant date using the Monte Carlo simulation model. The weighted-average assumptions used in the Monte Carlo model are as follows:

Stock options and warrants are equity classified, not liability classified, and are not remeasured at fair value.