NOTE 12 — STOCKHOLDERS’ DEFICIT

The Company has 1,400,000,000 authorized shares of common stock, with a par value of $0.001 per share.

On June 22, 2026, the Company effected the Reverse Stock Split resulting in the proportional adjustments to the number of outstanding common stocks. The Reverse Stock Split did not change the par value of the Company’s common stock or the authorized number of shares. No fractional shares were issued in connection with the Reverse Stock Split. Accordingly, stockholders who would have received will pay cash in lieu of fractional shares.

All share numbers and per share amounts are retroactively presented in this Form 10-Q to reflect the impact of the Reverse Split as if they had taken effect on January 1, 2025.

During the six months ended June 30, 2026, the Company issued 760,710 shares of common stock as follows:

There were 18,289,562 and 17,528,852 shares of common stock issued and outstanding, as of June 30, 2026 and December 31, 2025, respectively.

For the three and six months ended June 30, 2026, the Company recorded approximately $3.5 million and $14.6 million stock-based compensation expense, respectively which is included in the personal and benefit expense and legal and professional fee in the unaudited condensed consolidated statements of operations and comprehensive loss.

For the three and six months ended June 30, 2025, the Company recorded approximately $17.1 million and $45.9 million stock-based compensation expense, respectively which is included in the personal and benefit expense and legal and professional fee in the unaudited condensed consolidated statements of operations and comprehensive loss.

The Company has authorized a total of 100,000,000 shares of preferred stock with a par value of $0.001 per share. Of this amount the Company has authorized 50,000,000 shares and 50,000,000 shares to two classes of preferred stock, Series A-1 Preferred Stock and Series B Preferred Stock, respectively.

A description of each class of preferred stock is listed below:

Series A-1 Preferred Stock

The Company designated up to 11,803,398 shares as Series A-1 Preferred Stock, with a par value of $0.001 per share. Each share of Series A-1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of common stock.

In connection with the Merger Transaction, the Company issued 11,801,804 shares of Series A-1 Preferred Stock to the holders of Triller Corp preferred stock and 11,801,804 shares of Series A-1 Preferred Stock to be issued to Giant Wisdom Ventures Limited.

There were 11,801,804 and 11,801,804 shares of Series A-1 Preferred Stock issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Series B Preferred Stock

The Company designated up to 35,000 shares of Series B Preferred Stock, with a par value of $0.001 per share. Each share of Series B Preferred Stock shall be entitled to 10,000 votes for each share of Series B Preferred Stock held by such holder.

On January 1, 2026, pursuant to the bylaws of the Company, all outstanding Series B Preferred Stock were redeemed at par value. Following the redemption, there were no shares of Series B Preferred Stock outstanding and all rights of Series B Preferred Stockholders were terminated.

There were nil and 30,851 shares of Series B Preferred Stock issued and outstanding as of June 30, 2026 and December 31, 2025, respectively. 

The Company has committed to issue common stocks as compensation for services:

There were 675,224 and 1,179,521 shares of common stock to be issued as of June 30, 2026 and December 31, 2025, respectively.

There were 2,420,625 shares of common stock deposited into an escrow account in the name of the Company, acting as escrow agent, in connection with the merger transaction completed on October 15, 2024.

During the six months ended June 30, 2026 and 2025, nil and 204,396 shares common stock held in escrow, respectively are transferred out to settle claims that relate to the affairs of Triller Corp. prior to the closing date of the merger transaction with common stock held in escrow.

There were 2,197,847 and 2,197,847 shares of common stock held in escrow issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Pursuant to the Share Award Scheme, the Company filed S-8 registration statement to register up to 565,235 shares of common stock on February 24, 2023.

The fair value of the common stock granted during the period is measured based on the closing price of the Company’s common stocks as reported by Nasdaq Exchange on the date of grant. For those vested immediately on the date of grant, the fair value is recognized as stock-based compensation expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026 and December 31, 2025, 1,158 and 1,158 shares of common stock are available to issue under the Share Award Scheme, respectively.

2022 RSUs

In December 2022, the Company approved and granted 242,063 shares of common stock as RSUs to employees and consultants as additional compensation under the Scheme. These RSUs typically will be vested over one to four years period from 2023 to 2026.

For the RSUs, the fair value is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis. The valuations assume no dividends will be paid. The Company has assumed 10% forfeitures.

As of June 30, 2026 and December 31, 2025, 29,243 and 29,243 shares of common stock are available to issue under the plans, respectively.

During the three and six months ended June 30, 2026, the Company recorded approximately $0.05 million and $0.1 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

During the three and six months ended June 30, 2025, the Company recorded approximately $0.9 million and $1.4 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026 and December 31, 2025, total unrecognized compensation remaining to be recognized in future periods for RSUs totaled approximately $0.1 million and $0.2 million, respectively. They are expected to be recognized over the weighted average period of 0.23 years.

A summary of the activities for the Company’s RSUs as of June 30, 2026 and December 31, 2025 is as follow:

2025 RSUs

In January 2025, the Company approved and granted 336,300 shares of common stock as RSUs to employees as additional compensation under the Scheme. These RSUs typically will be vested over two three months period from 2025 to 2027.

As of June 30, 2026 and December 31, 2025, 185,136 and 185,136 shares of common stock are available to issue under the plans, respectively.

During the three and six months ended June 30, 2026, the Company recorded approximately $0.3 million and $1.0 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

During the three and six months ended June 30, 2025, the Company recorded approximately $0.8 million and $1.6 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026, total unrecognized compensation remaining to be recognized in future periods for RSUs totaled approximately $0.8 million. They are expected to be recognized over the weighted average period of 0.83 years.

A summary of the activities for the Company’s 2025 RSUs as of June 30, 2026 and December 31, 2025 is as follows:

RSUs previously held by Triller Corp. (“Triller RSUs”)

In connection with the Merger Transaction, the Company approved the conversion of all RSUs under Triller Corp. into 1,700,403 shares of common stocks of the Company as RSUs to certain employees, and the reservation of an aggregate of 1,700,403 shares of common stocks for future issuance upon the vesting of the RSUs. Triller RSUs typically will be vested over one to three year period from 2025 to 2027.

The fair value is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis. The valuations assume no dividends will be paid.

During the three and six months ended June 30, 2026, the Company recorded approximately $4.0 million and $12.5 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

During the three and six months ended June 30, 2025, the Company recorded approximately $11.1 million and $35.4 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026, total unrecognized compensation remaining to be recognized in future periods for RSUs totaled approximately $10.1 million. They are expected to be recognized over the weighted average period of 0.79 years.

A summary of the activities for the Triller RSUs as of June 30, 2026 and December 31, 2025 is as follows:

Share Incentive (the “Incentive Scheme”)

In 2024, an aggregate of 1,626,660 shares were granted to the former chairman, directors and officers of the Company and vested upon closing of the Merger Transaction. Among these, 484,125 were vested monthly in equal instalments over next two years commencing from October 15, 2024.

The fair value is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis. The valuations assume no dividends will be paid.

During the three and six months ended June 30, 2026, the Company recorded approximately $1.0 million and $2.9 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

During the three and six months ended June 30, 2025, the Company recorded approximately $1.9 million and $3.8 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026, total unrecognized compensation remaining to be recognized in future periods for Incentive Scheme totaled approximately $1.6 million. They are expected to be recognized over the weighted average period of 0.33 years.

A summary of the activities for the Incentive Plan as of June 30, 2026 and December 31, 2025 is as follow:

Pursuant to the 2024 Equity Incentive Plan (the “2024 Plan”), the Company filed S-8 registration statement to register 774,600 and 3,099,840 shares of common stock on August 29, 2024 and November 27, 2024, respectively.

The fair value of the common stock granted during the period is measured based on the closing price of the Company’s common stock as reported by Nasdaq Exchange on the date of grant. For those vested immediately on the date of grant, the fair value is recognized as stock-based compensation expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026 and December 31, 2025, 186,512 and 206,512 shares of common stock are available to issue under this plan.