NOTE 9. STOCK-BASED COMPENSATION

Stock Option Awards

On June 18, 2026, the Company granted options to purchase an aggregate of 230,168 shares of common stock to its four non-employee directors, with an exercise price of $3.70 per share and a 10-year contractual term. The options vest 25% on the grant date and 25% on each of the next three fiscal quarter-ends, subject to continued service. The grant date fair value of the options was $562,988 using the Black-Scholes option pricing model.

On June 18, 2026, the Company granted options to purchase an aggregate of 150,000 shares of common stock to certain employees, with an exercise price of $3.70 per share and a 10-year contractual term. The options vest 25% on the grant date and 25% on each of the next three fiscal quarter-ends, subject to continued service. The grant date fair value of the options was $366,900 using the Black-Scholes option pricing model.

The Company recognized $275,172 in stock-based compensation expense for the three and six months ended June 30, 2026.

Restricted Stock Awards

On June 18, 2026, the Company granted 358,566 restricted shares of common stock to Joshua Silverman, the Company’s Chief Executive Officer, with a grant date fair value of $2.51 per share and an aggregate fair value of $900,000. The award vests 25% on the grant date and 25% on each of the next three fiscal quarter-ends, subject to continued service.

The Company recognized $398,494 in stock-based compensation expense for the three and six months ended June 30, 2026.