NOTE 14 – STOCK-BASED COMPENSATION

As of September 30, 2026, approximately 6 million restricted share units (“RSUs”), fair valued at approximately $4 million with a weighted average value of $0.61 per share, have been granted or vested but not yet issued from different Incentive Plans and Grants.

Additionally, the Company has outstanding options held by advisors and directors to purchase approximately 13.4 million shares of common stock, fair valued at approximately $4.2 million with a weighted average of $0.31 per share, which have been granted or vested but are to be exercised over a period between Fiscal 2023 and Fiscal 2028.  

The above awards include approximately 4.6 million RSUs and options to purchase 4.1 million shares granted to employees and directors, which consist of a vesting schedule based entirely on the attainment of either operational milestones (performance conditions) or market conditions, assuming continued employment either as an employee, or director with the Company. The performance-based awards are accounted for upon certification by the Company’s management, confirming the probability of achievement of milestones. As of September 30, 2026, the Company’s management confirmed that eight milestones had been achieved, and the rest were probable to be achieved by March 31, 2028.

The amounts disclosed above include share-based awards granted to non-employees in exchange for consulting, investor-relations, investor-outreach and related services. The Company accounts for these awards in accordance with ASC 718, and the related compensation expense and unrecognized compensation cost are included in the aggregate amounts disclosed in this Note. As of September 30, 2026, the Company had issued an aggregate of 225,758 restricted shares under these arrangements.

The options are valued using a Black-Scholes Pricing Model, and Market-based RSUs are valued based on a lattice model, with the following assumptions:

The expense associated with stock-based payments to employees, directors, advisors, and contractors is allocated over the vesting or service period and recognized in the Selling, general, and administrative expenses (including research and development). For the nine months ended September 30, 2026, the Company’s stock-based expense and option-based expense, shown in Selling, general, and administrative expenses (including research and development), were $733 thousand and $1.4 million, respectively.

For the nine months ended September 30, 2025, the Company’s stock-based expense and option-based expense, shown in Selling, general, and administrative expenses (including research and development), were $805 thousand and $752 thousand, respectively. 

As of September 30, 2026, the Company had approximately $2.2 million of unrecognized stock-based compensation cost related to non-vested shares, options and warrants, which is expected to be recognized over a period of up to 3 years, subject to satisfaction of the applicable service and performance conditions.