Note 14 – Common Stock Options

The Company’s Board of Directors and stockholders adopted the 2022 Equity Incentive Plan (the “2022 Plan”) effective January 1, 2022. The 2022 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and other equity-based awards to employees, directors, and consultants.

The number of shares reserved for issuance under the 2022 Plan was initially 600,000 shares and was adjusted in connection with the Company’s 2023 reverse stock split. Pursuant to the 2022 Plan, the number of shares of common stock available for issuance thereunder automatically increases on the first day of each fiscal year of the Company in an amount equal to 5% percent of the total number of shares of our common stock outstanding on the last day of the immediately preceding fiscal year of the Company, unless the board of directors takes action prior thereto to provide that there will not be an increase in the share reserve for such year or that the increase in the share reserve for such year will be of a lesser number of shares of common stock than would otherwise occur. As of June 30, 2026, the annual increases to the plan resulted in 2,963,000 shares reserved for issuance under the 2022 Plan, of which options to purchase 2,773,470 shares of common stock were outstanding.

On February 10, 2026, the Compensation Committee of the Board of Directors approved grants of stock options to certain directors, employees and consultants under the 2022 Plan covering an aggregate of 1,390,000 shares of common stock, consisting of 100,000 shares subject to director awards and 1,290,000 shares subject to employee/consultant awards. All options were granted with an exercise price of $2.96 per share, equal to the closing market price of the Company’s common stock on the grant date and have a contractual term of ten years.

The director awards vest in equal monthly installments over a six-month period. The employee and consultant awards vest in one or more of the following manners, depending on the individual award agreement: (i) ratably over thirty-six months of continued service, (ii) upon the Company achieving at least $30.0 million of net revenue over the preceding twelve months while achieving positive EBITDA, (iii) upon the Company achieving $40.0 million of net revenue over the preceding twelve months while achieving positive EBITDA, or (iv) immediately on the grant date.

The Company determined that the service-based and immediately vested tranches had a grant date of February 10, 2026 and recognized grant-date fair value for those awards (or portions thereof) using the Black-Scholes option-pricing model. Key assumptions included:

The performance-based tranches tied to revenue and EBITDA milestones were determined not to have a grant date for accounting purposes as of June 30, 2026 because the applicable performance conditions and measurement requirements had not yet been satisfied. Accordingly, those tranches were not included in the grant-date fair value of awards granted during the quarter and no stock-based compensation expense was recognized for such tranches during the six months ended June 30, 2026.

For the six months ended June 30, 2026, the Company recognized stock-based compensation expense related to the February 10, 2026 grants for vested and service-based tranches only. Unrecognized compensation cost related to unvested service-based awards will be recognized over the remaining requisite service periods.

Expected volatility was estimated using a blended approach that incorporates the Company’s historical stock price volatility since the announcement of the Peru Facility together with the volatility of a selected peer group, with weighting applied to reflect the expected term of the awards. The expected term was determined using the simplified method.

The Company accounts for forfeitures as they occur and, accordingly, expects substantially all outstanding options to vest.

As of June 30, 2026, options to purchase 1,109,428 shares of common stock were vested and exercisable, with a weighted-average exercise price of $2.48 and a remaining contractual life of 8 years on a weighted-average basis.

Information for total options outstanding under 2022 Plan as of June 30, 2026 is presented below:

 Schedule of Stock Option Activity 

The Company recognized stock-based compensation expense of $272,932 and $77,073 for the three months ended June 30, 2026 and 2025, respectively, and $515,744 and $81,097 for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, total unrecognized compensation cost related to unvested stock options was $1.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.3 years. As of June 30, 2026, the weighted-average remaining contractual life of outstanding options was 8.8 years.