10. Share-Based Compensation

Summary of Restricted Common Stock

The following table summarizes restricted stock activity during the nine months ended September 30, 2026:

Schedule of Restricted Stock 

On February 2, 2026, the Company granted 1,400,000 shares of restricted common stock, consisting of 500,000 shares to its Chief Executive Officer, 300,000 shares in the aggregate to its directors, and 600,000 shares in the aggregate to its other executives. These shares had an aggregate grant-date fair value of $1,456,000, or $1.04 per share, and vest monthly over a 36-month period.

On February 1, 2025, the Company granted its Chief Executive Officer 250,000 shares of the Company’s restricted stock and granted 200,000 shares of the Company’s restricted stock to other officers with an aggregate fair value of $414,000 or $0.92 per share. The restricted stock grant vests monthly over a 36-month period.

During the nine months ended September 30, 2026 and 2025, the Company recognized $1,461,944 and $1,559,627 of stock compensation expense relating to vested restricted stock. As of September 30, 2026, the aggregate amount of unvested compensation related to restricted stock was approximately $2,874,944 which will be recognized as an expense as the restricted stock vests in future periods through February 2029.

Summary of Stock Options

Stock option activity during the nine months ended September 30, 2026 is as follows:

Schedule of Stock Options 

On February 2, 2026, the Company, pursuant to the terms of its 2019 Stock Incentive Plan, granted options exercisable into 765,000 shares of its common stock to its executives and employees. The stock options are exercisable at a weighted average price of $1.03 per share with an average life to expiration of approximately nine years. The total fair value of these options at the grant date was approximately $791,000, which was determined using a Black-Scholes option pricing model with the following average assumptions: stock price of $1.04 per share, expected term of 6.00 years, volatility of 218%, dividend rate of 0%, and weighted average risk-free interest rate of 3.74%.

On June 30, 2026, the Company, pursuant to the terms of its 2019 Stock Incentive Plan, granted options exercisable into 55,000 shares of its common stock to its executives and employees. The stock options are exercisable at a weighted average price of $0.9480 per share with an average life to expiration of approximately nine years. The total fair value of these options at the grant date was approximately $52,000, which was determined using a Black-Scholes option pricing model with the following average assumptions: stock price of $0.9480 per share, expected term of 6.00 years, volatility of 216%, dividend rate of 0%, and weighted average risk-free interest rate of 4.25%.

On February 1, 2025, the Company, pursuant to the terms of its 2019 Stock Incentive Plan, granted options exercisable into 1,170,000 shares of the Company’s common stock to its executives and employees. The stock options vest over 36 months equally. The stock options are exercisable at a weighted average price of $0.92 per share with an average life to expiration of approximately nine years. The total fair value of these options at grant date was approximately $1,073,000, which was determined using a Black-Scholes-Merton option pricing model with the following average assumptions: stock price of $0.92 per share, expected term of 6.00 years, volatility of 241%, dividend rate of 0%, and weighted average risk-free interest rate of 4.45%.

During the nine months ended September 30, 2026 and 2025, the Company recognized $807,275 and $2,843,690 of stock compensation expense relating to vested stock options. As of September 30, 2026, the aggregate amount of unvested compensation related to stock options was approximately $982,025 which will be recognized as an expense as the options vest in future periods through June 2029.

The weighted average remaining contractual life of common stock options outstanding and exercisable at September 30, 2026, was 8.26 years. Based on a fair market value of $0.49 per share on September 30, 2026, the intrinsic value attributed to exercisable and unexercised common stock options was $0 at September 30, 2026.

The exercise prices of common stock options outstanding and exercisable at September 30, 2026 are as follows:

Schedule of Options Summarized by Exercise Price