STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

19. STOCK-BASED COMPENSATION

On September 8, 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”). As of December 31, 2025 and 2024, there were 29 and 104 options outstanding under the 2016 Plan, respectively. On February 6, 2025, the 2016 Plan was terminated and replaced with the 2025 Plan, and on August 1, 2025 the Board of Directors adopted the 2025 Plan.

2025 Equity Incentive Plan

The 2025 Plan initially authorized 4,588,802 shares of common stock, which was equal to 15% of the outstanding shares of common stock on a fully-diluted basis available for award under the 2025 Plan. The 2025 Plan provides for an annual increase to such available number of shares by 5% of the shares of common stock outstanding on a fully-diluted basis each year for a period of seven years, with the first such increase to occur on January 1, 2026. The 2025 Plan provides for the issuance of incentive stock options, non-statutory stock options, share appreciation rights, restricted shares, restricted share units, and other share-based awards. Awards generally vest based on continued service over periods ranging from one to three years. Stock options generally have a contractual term of ten years from the grant date.

Stock Options

A summary of all stock option activity as of and for the years ended December 31, 2025 and 2024 is presented below:

	# of Options			Weighted-Average Remaining Life (Years)		Weighted- Average Exercise Price		Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2023		212			0.3	$	579.50	$	-
Options forfeited		(108	)				1,215.91
Outstanding as of December 31, 2024		104			0.2	$	304.34
Options granted		1,552,000					0.94
Options forfeited from 2016 Plan		(75	)				304.39	$	-
Outstanding as of December 31, 2025		1,552,029			9.4	$	0.95	$	1.2
Exercisable as of December 31, 2025		468,029			9.4	$	0.92	$	0.4

As of December 31, 2025, there were 1,084,000 unvested options with an aggregate grant date fair value of $3.8 million. The unvested options will vest in accordance with the vesting schedule in each respective option agreement, which is two years from the grant date. The aggregate intrinsic value of unvested options as of December 31, 2025 was $0.8 million. During the year ended December 31, 2025, 468,000 options vested.

The Company uses the Black-Scholes valuation model to measure the grant-date fair value of stock options. The grant-date fair value of stock options issued to employees is recognized on a straight-line basis over the requisite service period.

To determine the fair value of stock options using the Black-Scholes valuation model, the calculation takes into consideration the effect of the following:

● Exercise price of the option

● Fair value of the common stock on the date of grant

● Expected term of the option

● Expected volatility over the expected term of the option

● Risk-free interest rate for the expected term of the option

The calculation includes several assumptions that require management’s judgment. The expected term of the options is calculated using the simplified method described in GAAP. The simplified method defines the expected term as the average of the contractual term and the vesting period. Estimated volatility is derived from volatility calculated using historical closing prices of common shares of similar entities whose share prices are publicly available for the expected term of the options. The risk-free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the options.

The following assumptions were used in the Black-Scholes valuation model for options granted during the year ended December 31, 2025:

Volatility		138-163	%
Risk-free interest rate		3.76% - 4.13	%
Expected term (in years)		5.17-5.75
Expected dividend yield		-
Exercise price of common stock	$	0.92 - $1.51

The weighted-average grant-date fair value per share of stock options granted during the year ended December 31, 2025 was $3.52 per share. The aggregate grant date fair value of the 1,552,000 options granted during the year ended December 31, 2025 was $5.5 million.

For the year ended December 31, 2025, net compensation expense related to stock options was $2.5 million and included in compensation, commissions and benefits in the consolidated statements of operations. As of December 31, 2025, the total compensation expense related to stock options not yet recognized is $3.0 million, which is expected to be recognized over a weighted-average period of 0.86 years.

See Note 25, Subsequent Events for stock option activity in 2026.

Restricted Stock Awards

Restricted stock awards (“RSAs”) represent issued shares of common stock that vest based on continued service. Compensation cost is measured based on the grant-date fair value of the Company’s common stock and recognized over the vesting period. Unvested RSAs are subject to forfeiture and are not considered outstanding for earnings per share purposes until vested.

A summary of all RSA activity as of and for the year ended December 31, 2025 is presented below:

	# of RSAs			Weighted-Average Fair Value
Unvested as of December 31, 2023		-		$	-
Unvested as of December 31, 2024		-		$	-
Granted		553,647		$	3.58
Released		(260,482	)		(3.76	)
Unvested as of December 31, 2025		293,165		$	3.42

Stock-based compensation expense related to RSAs for the year ended December 31, 2025 was $1.2 million and included in general and administrative expenses in the consolidated statements of operations. The total value of RSA grants was $1.9 million for the year ended December 31, 2025. As of December 31, 2025, total unrecognized compensation cost related to unvested RSAs was $0.7 million, which is expected to be recognized over a weighted-average period of 1.24 years and included in additional paid-in capital on the consolidated balance sheets.

Restricted Stock Units

Restricted stock units (“RSUs”) generally vest based on performance targets or continued service over a period of time and represent the right to receive one share of the Company’s common stock for each RSU that vests. The grant-date fair value of RSUs is measured based on the closing price of the Company’s common stock on the grant date. The Company accounts for forfeitures as they occur.

A summary of all RSU activity as of and for the year ended December 31, 2025 is presented below:

	# of RSUs		Weighted-Average Fair Value
Unvested as of December 31, 2023		-	$	-
Unvested as of December 31, 2024		-	$	-
Granted		190,000	$	3.48
Unvested as of December 31, 2025		190,000	$	3.48

Stock-based compensation expense related to RSUs for the year ended December 31, 2025 of $0.4 million was included in general and administrative expenses and $0.1 million was included in compensation, commissions and benefits in the consolidated statements of operations. The total value of RSU grants was $0.7 million for the year ended December 31, 2025. As of December 31, 2025, total unrecognized compensation cost related to unvested RSAs was $0.2 million.

RSUs are settled in shares of the Company’s common stock upon vesting. Shares withheld to satisfy employee tax withholding obligations are accounted for as equity transactions.

See Note 25, Subsequent Events for RSU activity in 2026.