Note 14     SHARE-BASED COMPENSATION

In 2018, the Company’s Board of Directors and stockholders adopted the 2018 Stock Option and Award Incentive Plan (the “2018 Plan”). The 2018 Plan provides for the issuance of equity-based awards to employees and non-employee service providers. As of June 30, 2026, 89,654 shares of Common Stock remained available for future issuance under the 2018 Plan.

Warrants

The Company granted equity-based awards, primarily in the form of warrants, in exchange for services rendered. As of June 30, 2026, the Company had outstanding warrants issued to officers, directors, and employees to purchase shares of Common Stock.

Nonemployee Advisory Compensation

In connection with the Strategic Advisory Agreement (the “Advisory Agreement”) described in Note 18, the Company is obligated to issue $50,000 of restricted common stock to Phoenix MGMT & Consulting LLC (“Phoenix”) per quarter, with the number of shares determined based on the five-day volume-weighted average price (“VWAP”) of the Company's common stock, issued within 10 business days following the end of each quarter. The Company determined that this award is classified as a liability in accordance with ASC 718, Share-Based Compensation (“ASC 718”), because the award is settled in a variable number of shares with a fixed monetary value. The award is remeasured at fair value at each reporting date, with changes in fair value recognized in general and administrative expenses in the unaudited condensed consolidated statements of operations, until the award is settled through the issuance of shares. The requisite service period for each quarterly award corresponds to the quarter to which the award relates.

Under the Advisory Agreement, Phoenix is also entitled to a transaction fee equal to 5% of the value of certain qualifying strategic transactions consummated during the term, payable 50% in cash and 50% in shares of common stock valued based on the five-day VWAP preceding the closing of the applicable transaction. Consistent with the fixed-monetary-value mechanics described above, the stock-settled portion of any such fee, if and when recognized, will be classified as a liability under ASC 718. As of June 30, 2026, no transaction fee had been earned, as no qualifying transaction had been introduced, structured, materially advanced, or consummated during the period.

On April 15, 2026, the Company granted 92,333 shares of its common stock to certain employees under the Company's 2018 Plan as compensation for services rendered.