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EMPLOYEE STOCK PLANS

12 Months Ended

Dec. 31, 2024

Retirement Benefits [Abstract]

EMPLOYEE STOCK PLANS

NOTE 17 — EMPLOYEE STOCK PLANS

Equity Incentive Plans

On May 22, 2024, the Company’s Board approved the 2024 Equity Inventive Plan (“2024 Plan”) and Restricted Stock Units (“RSUs”) Agreements. The 2024 Plan and RSUs Agreement authorized the award of stock options, RSUs to employees and directors.

The Company recorded $922,399 and $nil stock-based compensation expense in connection with RSUs for years ended December 31, 2024 and 2023, respectively.

The following table summarized the Company’s RSU activity:

SUMMARY OF RESTRICTED STOCK UNIT ACTIVITY

		Number of RSUs				Weighted Average Grant Date Fair Value				Weighted Average Remaining Life in Years
Granted			328,334				3.76				0.58
Forfeited			(1,000	)			3.88				-
Vested			(226,334	)			3.70				-
Outstanding December 31, 2024			101,000			$	3.88				0.37
Exercisable, December 31, 2024			-			$	-				-

MASSIMO GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 — EMPLOYEE STOCK PLANS (continued)

Options

On May 22, 2024, the Company signed a stock option agreement with Mr. David Shan, the Chief Executive Officer and two other executives of the Company, in connection with the 2024 Plan.

As part of the compensation, the Company agrees to grant Mr. Shan options to purchase up to 46,860 common shares under Incentive Stock Option (“ISO”) plan, at an exercise price of $4.268 per share. The options were granted on May 22, 2024, and the options vest at a rate of 23,430 per year for two years, effective on May 22, 2024. The aggregate fair value of the options granted to Mr. Shan was $73,000. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying common shares at time of grant of $3.88; risk free rate of 5.0% and 4.65%; expected term of 5 years; exercise price of the options of $4.268; volatility of 88.8%; and expected future dividends of $nil. These options will expire on May 21, 2029.

The Company also granted Mr. Shan options to purchase up to 103,140 common shares, at an exercise price of $4.0 per share under Nonqualified Stock Option (“NSO”) plan. The options were granted on May 22, 2024, and vest at a rate of 51,570 shares per year for two years, effective on May 22, 2024. The aggregate fair value of the options granted to Mr. Shan was $160,000. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying common shares at time of grant of $3.88; risk free rate of 5.0% and 4.65%; expected term of 10 years; exercise price of the options of $4.0; volatility of 88.8%; and expected future dividends of $nil. These options will expire on May 21, 2034.

The Company also granted two executives options to purchase up to 200,000 common shares, at an exercise price of $4.0 per share under ISO and NSO plans. The options were granted on May 22, 2024, and vest at a rate of 100,000 shares per year for two years, effective on May 22, 2024. The aggregate fair value of the options granted to these two executives was $272,000. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying common shares of $3.88; risk free rate of 5.0% and 4.65%; expected term of 10 years; exercise price of the options of $4.0; volatility of 88.8%; and expected future dividends of $nil. These options will expire on May 21, 2034.

As of December 31, 2024, intrinsic value of the options is nil.

The Company recorded $224,190 and $nil stock-based compensation expense in connection with options for years ended December 31, 2024 and 2023, respectively.

The following table summarized the Company’s share option activity:

SCHEDULE OF SHARE OPTION ACTIVITY

		Number of Options				Weighted Average Exercise Price				Weighted Average Remaining Life in Years
Granted			350,000				4.04				9.23
Cancelled			-				-				-
Vested			-				-				-
Unvested balance, December 31, 2024			350,000			$	4.04				8.72
Exercisable, December 31, 2024			-			$	-				-

As of December 31, 2024, the total unrecognized compensation cost related to outstanding RSUs and stock options was $307,397 and $278,749, which the Company expects to recognize over a weighted-average period of 0.37 years and 1.07 years.

MASSIMO GROUP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

X

- Definition

The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans.

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-Topic 718
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