12. EQUITY-BASED COMPENSATION

Restricted Stock Units

In December 2025, the Company granted 303,924 restricted stock units to executives of the Company and 104,271 restricted stock units to its board members. These restricted stock units have vesting periods over the next three years.

In 2026, the Company granted 12,500 shares restricted stock units to a consultant that vests over 18 months and 12,073 that vest over 4 years.

Restricted stock unit activity as of and for the periods below was as follows:

 SCHEDULE OF RESTRICTED STOCK ACTIVITY

The Company recognized approximately $149,000 and $0 in equity-based compensation on restricted stock units for the three months ended June 30, 2026 and 2025, respectively. The Company recognized approximately $297,000 and $0 in equity-based compensation on restricted stock units for the six months ended June 30, 2026 and 2025, respectively.

Shares of Restricted Stock

In 2025, employees and contractors were granted a total of 76,926 shares of restricted stock. The restricted stock award vested 100% on December 13, 2025.

In March 2026, the Company awarded 6,628 shares of restricted stock to a consultant that vested 100% immediately. This consultant also received 15,950 shares of restricted stock in June 2026 that vested 100% immediately.

Restricted stock activity as of and for the periods below was as follows:

 SCHEDULE OF RESTRICTED STOCK ACTIVITY

Total equity-based compensation expense related to shares of restricted stock issuances was approximately $19,000 and $0 for the three months ended June 30, 2026 and 2025, respectively. Total equity-based compensation expense related to shares of restricted stock issuances was approximately $31,000 and $0 for the six months ended June 30, 2026 and 2025, respectively.

Stock Options

Stock option activity as of and for the periods below was as follows:

 SCHEDULE OF STOCK OPTION ACTIVITY

Equity-based compensation expense totaling $0 has been recognized relating to these stock options during the three and six months ended June 30, 2026 and 2025.

 Warrants

Warrant activity as of and for the periods below was as follows:

 SCHEDULE OF WARRANTS

The Company uses the Black-Scholes option-pricing model to estimate the fair value of equity-based awards. The inputs for the Black-Scholes valuation model require management’s significant assumptions. Prior to the Company’s IPO, the price per share of common stock was determined by the Company’s board based on recent prices of common stock sold in private offerings. Subsequent to the IPO, the price per share of common stock is determined by using the closing market price on the NYSE American on the grant date. The risk-free interest rate is based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal to the expected life at the grant date. The expected term for employee and non-employee awards ranged from 5 to 10 years based on industry data, vesting period, contractual period, among other factors. The expected volatility was estimated based on historical volatility information of the Company. The Company does not expect to pay dividends. For awards with a performance condition, stock compensation is recognized over the requisite service period if it is probable that the performance condition will be satisfied.