NOTE 10 – STOCK-BASED COMPENSATION AND RESTRICTED STOCK AWARDS

In May 2021, the Board of Directors approved the Farmhouse, Inc. 2021 Omnibus Incentive Plan (the “2021 OIP”), which permits the issuance of up to 3,000,000 shares of common stock through awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, other stock-based awards, and cash-based awards. The 2021 OIP was approved by stockholders holding a majority of the Company’s outstanding shares.

Stock Options

Options granted under the 2021 OIP may be either incentive stock options, as defined by Section 422 of the Internal Revenue Code, or nonqualified stock options. The exercise price of options must not be less than 100% of the fair market value of the Company’s common stock on the date of grant (110% for holders of more than 10% of the voting stock). Options vest as determined by the Board of Directors and expire no later than ten years from the date of grant (five years for optionees owning more than 10% of voting stock).

No stock options or other equity instruments were granted during the periods presented.

Restricted Stock Awards (“RSAs”)

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation, recognizing expense based on the grant-date fair value of awards over the requisite service period. RSAs are issued at fair market value on the grant date and typically vest over time, subject to continued service. Stock-based compensation is recognized on a straight-line basis over the vesting period unless the awards are fully vested upon grant.

The following table summarizes RSA activity:

During the year ended December 31, 2025, the Company granted 400,000 RSAs, in connection with CFO services. The weighted-average grant date fair value of these RSAs was based on the Company’s common stock price of approximately $0.011 per share on the grant date. These RSAs were fully vested upon grant, and the related expense of $4,480 was recognized immediately.

During the year ended December 31, 2024, the Company granted a total of 350,000 RSAs, including:

·100,000 shares awarded for CFO services, vesting through March 31, 2025; 

·240,000 shares granted to legal counsel in connection with the proposed Thrown transaction, vesting through May 31, 2026; and  

·10,000 shares granted to a consultant, vesting through December 31, 2024.  

Stock-based compensation expense recognized was $17,060 (including the $4,480 recognized for RSAs issued in 2025 plus $12,580 recognized for the vesting of RSAs issued in prior years) and $48,879 for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company had $4,200 of unrecognized compensation expense related to non-vested RSAs, which is expected to be recognized over a weighted-average period of approximately 4.9 months, all within 2026.