NOTE 6 – STOCK BASED COMPENSATION

In March 2022, the Board of Directors of the Company approved the Amended and Restated Equity Incentive Plan which was approved by the shareholders at the Company’s Annual General Meeting of Shareholders held on April 12, 2022 (the “Amended Plan”). The Amended Plan increased the number of ordinary shares reserved for issuance under such equity incentive plan to 15% of the Company’s outstanding ordinary shares on a fully-diluted basis, or 9,197,277 ordinary shares represented by 262,779 ADSs as of December 31, 2024. Under the Amended Plan, the Company could grant options to its directors, officers, employees, consultants, advisers and service providers. As of the year ended December 31, 2025 200,627 options are outstanding under the Amended Plan and following approval of the 2025 Equity Incentive Plan, no shares are available for issuance under the Amended Plan.

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On August 21, 2025, at our 2025 Annual General Meeting of Shareholders, our shareholders approved the Quoin Pharmaceuticals Ltd. 2025 Equity Incentive Plan (the “2025 Plan”) and authorized the issuance pursuant to the 2025 Plan of up to 3,000,000 Ordinary Shares represented by 85,714 ADSs, subject to an automatic annual increase equal to the smaller of (a) fifteen percent (15%) of the number of Ordinary Shares issued and outstanding on a fully diluted basis on the immediately preceding December 31, or (b) an amount determined by our Board of Directors. The 2025 Plan supersedes the Amended Plan. As of the year ended December 31, 2025, 2,463,450 shares represented by 70,384 ADSs are available for issuance under the 2025 Plan.

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The following table summarizes stock-based activities under the Amended & 2025 Plans:

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The intrinsic value of outstanding options at December 31, 2025 was $0.8 million.

Stock options granted during the years ended December 31, 2025 and 2024 were valued using the Black-Scholes option-pricing model with the following weighted average assumptions:

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Stock based compensation expense was approximately $1.15 million ($400,000 included in research and development expense and $750,000 included in general and administrative expenses) in the year ended December 31, 2025. Stock based compensation expense was approximately $1.26 million ($293,000 included in research and development expense and $967,000 included in general and administrative expenses) in the year ended December 31, 2024. At December 31, 2025, the total unrecognized compensation expense related to non-vested options was approximately $2.5 million and is expected to be recognized over the remaining weighted average service period of approximately 3.35 years.