NOTE 12 — STOCK-BASED COMPENSATION

Unrestricted Common Stock Awards

During the nine months ended September 30, 2026, no unrestricted common stock awards were granted and no related compensation expense was recognized.

During the three months ended March 31, 2025, the Company granted fully vested, unrestricted common shares to certain employees in connection with the terms of their individual employment agreements and recognized compensation expense of $121,410 in the period. This compensation cost is included within Research and Development expenses on the Company’s condensed consolidated statements of operations for the nine months ended September 30, 2025; no such expense was recognized during the three months ended September 30, 2025.

Restricted Stock Units and Stock Options

During the three and nine months ended September 30, 2026, the Company granted 38,594 restricted stock units (“RSUs”) to its independent directors, as described below. During the three and nine months ended September 30, 2026, 0 and 6,667 unvested RSUs were forfeited in connection with management departure, resulting in a reversal of previously recognized compensation cost. The Company recognized $15,407 and $44,965 in stock-based compensation expense related to RSUs for the three and nine months ended September 30, 2026, included within operating expenses on the Company’s condensed consolidated statements of operations.

Independent Director RSU Grants

On August 31, 2026, the Board of Directors, upon the recommendation of the Compensation Committee, approved a revised compensation program for the Company’s independent directors, which superseded all prior resolutions regarding director compensation. Under the program, each independent director receives an annual award of RSUs with a value of $100,000 for a full calendar year of Board service, with the number of RSUs determined by dividing the award value by the closing price of the Company’s common stock on the last trading day preceding the grant date and rounding down to the nearest whole unit. Each annual grant is subject to separate approval by the Board of Directors.

On September 1, 2026, the Company granted a total of 38,594 RSUs under the 2023 Equity Incentive Plan for 2026 Board service, consisting of 12,853 RSUs to each of the two independent directors who served for the full 2026 calendar year and 4,296 RSUs to each of the three independent directors appointed to the Board on August 31, 2026, whose awards were prorated for the portion of 2026 remaining from the grant date. The RSUs vest in three equal annual installments on the first three anniversaries of the grant date, subject to the director’s continued service. The grant-date fair value of the RSUs was $7.66 per unit, based on the closing price of the Company’s common stock on the grant date, or approximately $295,630 in the aggregate. The Company recognizes compensation cost for these awards using the graded vesting (accelerated attribution) method, under which each vesting tranche is expensed over its own requisite service period beginning on the grant date, and accounts for forfeitures as they occur. For the three and nine months ended September 30, 2026, the Company recognized $14,841 of stock-based compensation expense related to these awards, included within general and administrative expenses.

The following table summarizes RSU activity for the nine months ended September 30, 2026:

As of September 30, 2026, total unrecognized compensation cost related to unvested RSUs was approximately $301,555, expected to be recognized over a weighted-average period of 1.83 years.

During the nine months ended September 30, 2025, the Company granted restricted stock units to certain executives and management in connection with the terms of their individual employment agreements. The Company recognized the amount of $71,049 and $351,157 for the three and nine months ended September 30, 2025, respectively. This compensation cost is included within Research and Development expenses on the Company’s condensed consolidated and combined statements of operations. There were no stock options granted or outstanding during the period ended September 30, 2025.

Warrants

There were no warrants granted during the three and nine months ended September 30, 2026. There were 12,000 at-the-money warrants outstanding as of September 30, 2026.

During the three and nine months ended September 30, 2025, the Company granted 0 and 12,000 at-the-money warrants, respectively, to certain executive officers pursuant to the terms of their individual employment agreements. The warrants were fully vested upon grant and expire on February 2, 2029, however, the exercise price has not been established.

Awards with Market-Based Conditions

In connection with the aforementioned executive employment agreements, certain executives are eligible to receive unrestricted shares of common stock if certain stock price targets are met during the term of the respective employment agreements. A stock price target will be satisfied if the 120-day trailing average closing price (based on trading days) of a share of the Company’s common stock equals or exceeds the applicable stock price target, which range from $1,500 to $15,000 per share. The executives could be granted up to 120,000 shares based on attainment of all applicable stock price targets over the term of six years and an estimated fair value of approximately $4,800,000. The Company recognized $278,176 and $834,529 of stock-based compensation expense related to these awards for each of the three and nine months ended September 30, 2026 and 2025. This compensation cost is included within Selling, General, and Administrative expenses on the Company’s condensed consolidated statements of operations.

The following table summarizes our awards with market-based conditions:

Awards with Performance Conditions

In connection with the aforementioned executive employment agreements, certain executives are eligible to receive cash incentive payments in connection with the Company achieving certain capital raise targets. In addition, these executives can also receive a cash bonus equal to 2.5% of the equity value of the Company (up to $10 million for each executive, totaling $20 million) in an applicable sale of the Company as defined by the terms of the employment agreements. Through September 30, 2026, it was not considered probable that either performance condition would be achieved, and therefore no expense was recorded related to these awards.

Stock-based Compensation to Consultants

The Company periodically grants equity awards to non-employee consultants and contractors in exchange for services provided to the Company. The Company accounts for these awards in accordance with ASC 718. The grant-date fair value of the awards is measured on the date the awards are approved and the terms of the award and the recipient’s service obligation are established.

Equity awards granted to non-employee consultants and contractors may vest upon the grant date or over a specified service period. The Company recognizes stock-based compensation expense based on the grant-date fair value of the awards over the applicable service period. The grant-date fair value of shares issued is generally based on the closing price of the Company’s common stock on the date of grant.

During the three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of $0 and $671, respectively, related to equity awards granted to consultants and contractors, included within operating expenses. No such expense was recognized during the three and nine months ended September 30, 2026.