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Stock-Based Compensation:

3 Months Ended

Mar. 31, 2026

Stock-Based Compensation:

Stock-Based Compensation:

Note 7 – Stock-Based Compensation:

2020 Equity Incentive Plan

Upon completion of the Spin-Off, the Company’s 2020 Equity Incentive Plan (the “2020 Plan”) became effective on December 7, 2020. On December 20, 2023, the Company held its annual meeting of stockholders at which time the Company’s stockholders approved an amendment to the Company’s 2020 Plan was amended to increase the total number of shares of Common Stock authorized for issuance from 55,000 to an aggregate of 175,000 shares. On December 6, 2024, The Company held an annual meeting of stockholders whereby the Company’s stockholders approved an amendment to the Company’s 2020 Plan to increase the total number of shares of Common Stock authorized for issuance from 175,000 to 675,000. On August 6, 2025, the Company held a special meeting of stockholders whereby the Company’s stockholders approved amendments to the Company’s 2020 Plan to: (i) change its name to “TAO Synergies Inc. 2020 Equity Incentive Plan” and; (ii) to increase the total number of shares of Common Stock authorized for issuance from 675,000 to 2,675,000.

The Compensation Committee administers the 2020 Plan and has full power to grant stock options and Common Stock, construe and interpret the 2020 Plan, establish rules and regulations and perform all other acts, including the delegation of administrative responsibilities, as it believes reasonable and proper. The Compensation Committee, in its absolute discretion, may award Common Stock to employees, consultants, and directors of the Company, and such other persons as the Compensation Committee may select, and permit holders of options to exercise such options prior to full vesting.

Stock and Option Grants

The following is a summary of stock option activity under the stock option plans for the three months ended March 31, 2026:


							Weighted-
							Average		Aggregate
				Weighted-			Remaining		Intrinsic
		Number		Average			Contractual		Value
		of		Exercise			Term		(in
		Shares		Price			(Years)		thousands)
Options outstanding at January 1, 2026		93,681		$	50.28		8.7		$	2.2
Options granted		—		$	—		—			—
Less options forfeited		—		$	—		—			—
Less options expired/cancelled		—		$	—		—			—
Less options exercised		—		$	—		—			—
Options outstanding at March 31, 2026		93,681		$	50.28		8.4		$	0.6
Options exercisable at March 31, 2026		29,681		$	136.94		6.5		$	0.1

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of the Common Stock, which was $5.69 per share on March 31, 2026 and $3.68 per share on December 31, 2025.

On April 7, 2026, the Company granted an aggregate of 2,400 stock options to three Board members. The stock options have an exercise price of $5.52 per share, vest on the first anniversary of issuance and have an expiration date of ten years from the date of issuance. The Company used the Black Scholes valuation method to determine the fair value of the options assuming the following: implied volatility of 120.6%, a risk-free interest rate of 3.97% and aggregate fair value of $11,379, which is expensed over the vesting term.

As of March 31, 2026, the Company had unrecognized stock option expense of $108,740 and a remaining weighted average period for recognition of 0.29 years.

Director’s Compensation Policy

On March 29, 2023, the Company adopted an amended and restated non-employee director compensation policy (the “Director Compensation Policy”). The Director Compensation Policy provides for the annual automatic grant of nonqualified stock options to purchase up to 800 shares of the Company’s Common Stock to each of the Company’s non-employee directors. Such grants occur annually on the fifth business day after the filing of Company’s Annual Report on Form 10-K, if available under the Plan, and vest on the one-year anniversary from the date of grant, subject to the director’s continued service on the Board on the vesting date. Each newly appointed or elected director will also receive 800 options, and such options shall vest 50% on the grant date, 25% on the first anniversary of the grant date and 25% on the second anniversary of the grant date, subject to the director’s continued service on the Board on each vesting date. On April 7, 2026, the Company issued options to purchase a total of 2,400 shares of Common Stock as noted above.

Restricted Stock Issuances

On January 16, 2026, the Company issued 22,563 shares of restricted stock to a consultant engaged to provide investor relations services with a total fair market value on date of issuance of $100,000, expensed upon issuance. On March 6, 2026, the Company issued 1,025 shares of restricted stock to another consultant engaged to provide investor relations services with a total fair market value on date of issuance of $4,454, expensed upon issuance.

Stock Compensation Expense

The Company currently estimates, beginning at the closing date of the Series B offering, implied volatility factor for all options and warrants based upon the Company’s historical volatility. From November 21, 2022 to June 2025, the Company computed implied volatility based upon a blend of the Parent Company’s and Company’s historical volatility along with the volatility of selected comparable publicly traded companies as, at that time, the Company lacked sufficient historical stock trading activity. It incorporated the historical volatility of the Parent Company as the Parent Company’s historical volatility provides a good estimation of the Company’s volatility since its operations were identical to the Company’s prior to the Spin-Off. Since June 2025, the Company used its own implied volatility coupled with comparable company volatilities to arrive at a reasonable estimate of total volatility.

The Company recorded total expenses relating to the outstanding stock options and RSUs of $76,600 and $3,709 for the three months ended March 31, 2026 and 2025, respectively. Each of these expenses is classified under general and administrative expenses.