NOTE 14: STOCK-BASED COMPENSATION

Time Vesting Options

On April 1, 2025, the Company granted stock options to purchase an aggregate of 567,500 shares of common stock to employees pursuant to the Company’s 2023 Plan, which was previously approved by shareholders. The options have an exercise price of $1.95 per share, equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal annual installments over a three-year period, subject to continued service through each vesting date, and expire ten years from the date of grant. The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 96%, expected term of 6.5 years, risk-free interest rate of 4.00%, dividend yield of 0%, and the Company’s stock price of $1.95 as of the valuation date. The awards are recognized as stock-based compensation expense on a straight-line basis over the requisite service period in accordance with ASC 718, Compensation - Stock Compensation based on the grant-date fair value of the options.

On June 2, 2025, the Company granted stock options to purchase an aggregate of 378,000 shares of common stock to employees under the 2023 Plan. The options have an exercise price of $3.05 per share, equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal annual installments over a three-year period, subject to continued service through each vesting date, and expire ten years from the date of grant. The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94%, expected term of 6.5 years, risk-free interest rate of 4.17%, dividend yield of 0%, and the Company’s stock price of $3.05 as of the valuation date. The awards are recognized as stock-based compensation expense on a straight-line basis over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

On April 17, 2026, the Company granted stock options to purchase 150,000 shares of common stock to an employee under the 2023 Plan. The options have an exercise price of $3.84 per share, equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal annual installments over a three-year period, subject to continued service through each vesting date, and expire ten years from the date of grant. The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94%, expected term of 6.5 years, risk-free interest rate of 3.99%, dividend yield of 0%, and the Company’s stock price of $3.84 as of the valuation date. The awards are recognized as stock-based compensation expense on a straight-line basis over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

On May 27, 2026, the Company granted stock options to purchase an aggregate of 373,500 shares of common stock to employees under the 2023 Plan. The options have an exercise price of $3.69 per share, equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal annual installments over a three-year period, subject to continued service through each vesting date, and expire ten years from the date of grant. The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 93%, expected term of 6.5 years, risk-free interest rate of 4.28%, dividend yield of 0%, and the Company’s stock price of $3.69 as of the valuation date. The awards are recognized as stock-based compensation expense on a straight-line basis over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

A summary of time vesting options is included below:

Performance Vesting Options

A summary of performance vesting options is included below:

Market Vesting Options

On June 2, 2025, the Company accelerated the vesting of the market-vesting options to purchase 733,334 shares of common stock. Prior to such acceleration, the vesting of these options depended on the Company’s share price meeting various price targets. One such share price target was an amount equal to the “Guaranteed Price,” as such term is defined in the Merger Agreement by and among the Company, Reflect, CRI Acquisition Corporation, a Delaware corporation, and RSI Exit Corporation, a Texas corporation and representative of the former stockholders of Reflect (“RSI”). On March 14, 2025, the Company and RSI settled and resolved a dispute related to the Guaranteed Consideration. On June 2, 2025, in consideration of the efforts in resolving and settling such dispute, the Compensation Committee of the Company fully vested the 733,334 options. As a result of the amendment and corresponding vesting, the Company recognized stock compensation expense of $1,149 during the six months ended June 30, 2025.

A summary of market vesting options is included below:

A summary of total outstanding options is included below:

The weighted average remaining contractual life for total exercisable options is 5.83 years as of June 30, 2026.

Employee Awards

Stock-based compensation expense recognized related to stock options and restricted stock units to employees for the three months ended  June 30, 2026 and 2025 was $376 and $1,249, respectively, and is included in general and administrative expenses in the condensed consolidated financial statements.

Stock-based compensation expense recognized related to stock options and restricted stock units to employees for the six months ended  June 30, 2026 and 2025 was $646 and $1,251, respectively, and is included in general and administrative expenses in the condensed consolidated financial statements.

As of June 30, 2026, there was $3,913 of total unrecognized compensation expense related to unvested share-based awards, which is expected to be recognized over a weighted average period of approximately 2.34 years.

Director Awards

Compensation expense recognized for the issuance of stock options awarded to our Board of Directors for the three months ended  June 30, 2026 and 2025 was $54 and $141, respectively, and was included in general and administrative expenses in the condensed consolidated financial statements.

Compensation expense recognized for the issuance of stock options awarded to our Board of Directors for the six months ended  June 30, 2026 and 2025 was $108 and $141, respectively, and was included in general and administrative expenses in the condensed consolidated financial statements.

As of June 30, 2026 there was $108 unrecognized compensation expense related to share-based awards to directors, which is expected to be recognized over a weighted average period of approximately 0.5 years.