NOTE 14 – STOCK-BASED COMPENSATION

As of March 31, 2026, approximately 6.7 million restricted share units (“RSUs”) fair valued at approximately $4.0 million with a weighted average value of $0.59 per share, have been granted but not yet issued from different Incentive Plans and Grants.

Additionally, the Company has outstanding options held by advisors and directors to purchase approximately 13.1 million shares of common stock, fair valued at approximately $4.1 million with a weighted average of $0.31 per share, which have been granted but are to be issued over an exercise period between Fiscal 2023 and Fiscal 2028. Options granted and issued before the vesting period are expensed when issued.

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 March 31, 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 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 three months ended March 31, 2026, the Company’s stock-based expense and option-based expense, shown in Selling, general, and administrative expenses (including research and development), were $306 thousand and $703 thousand, respectively.

For the three months ended March 31, 2025, the Company’s stock-based expense and option-based expense, shown in Selling, general, and administrative expenses (including research and development), were $300 thousand and $155 thousand, respectively. 

There was a combined unrecognized expense of $2.9 million related to non-vested shares and share options that the Company expects to be recognized over a life of up to 4 years.