NOTE 12 – STOCK-BASED COMPENSATION AND RESTRICTED STOCK AWARDS

In May 2021, the Board of Directors approved the Farmhouse, Inc. 2021 Omnibus Incentive Plan (“2021 OIP”), permitting the issuance of up to 3,000,000 shares of common stock through awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, other stock-based awards, and cash-based awards. The 2021 OIP was ratified by stockholders holding a majority of the Company’s outstanding shares.

Stock Options

Options granted under the 2021 OIP may be either incentive stock options, as defined by Section 422 of the Internal Revenue Code, or nonqualified stock options. The exercise price of options must not be less than 100% of the fair market value of the Company’s common stock on the date of grant (110% for holders of more than 10% of the voting stock). Options vest as determined by the Board of Directors and expire no later than ten years from the date of grant (five years for optionees owning more than 10% of voting stock).

No stock options or other equity instruments were granted during the periods presented.

Restricted Stock Awards (“RSA”)

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation, recognizing expense based on the grant-date fair value of awards over the requisite service period. RSAs are issued at fair market value on the grant date and typically vest over time, subject to continued service. Stock-based compensation is recognized on a straight-line basis over the vesting period unless the awards are fully vested upon grant.

The following table summarizes RSA activity for the six months ended June 30, 2026:

During the six months ended June 30, 2026, the Company granted a total of 130,000 RSAs, including:

·120,000 shares granted to a consultant, vesting monthly through March 2027; and 10,000 shares granted to a consultant, vesting monthly through June 2026.  

Stock-based compensation expense recognized was $5,370 and $3,145 for the three months ended June 30, 2026 and 2025, respectively. Stock-based compensation expense recognized during the six months ended June 30, 2026 and 2025 was $8,140 and $6,290, respectively.

As of June 30, 2026, the Company had $8,820 of unrecognized compensation expense related to non-vested RSAs, which is expected to be recognized over a weighted-average period of approximately 7.8 months.