Ainos, Inc. Stock Compensation Disclosure
2023 Stock Incentive Plan
The Company effectuated an amendment to its 2021 Stock Incentive Plan, now restated as the Company 2023 Stock Incentive Plan (the “2023 SIP” or “Plan”) which includes, among other things, a change in the number of reserved shares under the Plan. Under the 2023 SIP, subject to a change in capital structure or a change in control, the aggregate number of shares which may be issued or transferred pursuant to awards under the Plan will be equal to up to twenty percent (20%) of shares of outstanding common stock of the Company existing as of December 31st of the previous calendar year (the “Plan Share Reserve”). Upon the effectiveness of the 2023 SIP on February 16, 2023, the aggregate number of shares which may be issued pursuant to awards under the Plan is shares of common stock, including shares that remained available for grant under the 2021 Stock Incentive Plan. On July 19, 2024, the Company filed Form S-8 to increase the aggregate number of shares may be issued to shares of common stock including shares that remained available for grant under the 2021 Stock Incentive Plan. On April 4, 2025, the Company filed Form S-8 to increase the aggregate number of shares that may be issued to shares of common stock. As of December 31, 2025, shares have been granted under the 2023 SIP.
2021 Stock Incentive Plan
On September 28, 2021, the Company’s board of directors, and on May 16, 2022, its shareholders approved the 2021 Stock Incentive Plan (the “2021 SIP”). On June 20, 2022, the 2021 SIP was effective following approval by its shareholders. The 2021 SIP seeks to attract and retain key personnel, and to strengthen the commitment of the Company’s directors, officers, employees, consultants and advisors by making available equity interests in the Company or compensation measured by reference to the value of Company’s common stock. The 2021 SIP provides for the issuance of up to shares (adjusted for the 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025) of the Company’s common stock pursuant to equity awards, including options, stock appreciation rights and restricted stock units. During the period from January 1, 2023 up to the date that the prior plan was superseded by the 2023 SIP, no shares were granted under the 2021 SIP.
2021 Employee Stock Purchase Plan
On June 20, 2022, the Company’s 2021 Employee Stock Purchase Plan (the “2021 ESPP”) was effective following an approval by its shareholders. The 2021 ESPP provides eligible employees (as such term is defined in the ESPP) with an opportunity to purchase common stocks of the Company at a discount through voluntary contributions and is intended to qualify as an employee stock purchase plan under Section 423 of the U.S. Internal Revenue Code of 1986, as amended. A total of shares (adjusted for the 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025) of common stock have made available for issuance under the ESPP. During the period from January 1, 2024 up to the date that the prior plan was superseded by the 2023 SIP, no shares were granted under the 2021 ESPP.
Based on the aforementioned plans, the Company will issue new shares upon option exercise or shares vested.
Restricted Stock Units (“RSUs”)
RSUs entitle the recipient to be paid out an equal number of common stock shares upon vesting which is generally years. The fair value of RSUs is based on the closing price of the underlying stock on the date of grant. A summary of the Company’s RSUs activity and related information for the years ended December 31, 2025 and 2024 is as follows:
| For the Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| Number of Shares | Weighted-Average Grant Date Fair Value Per Share | Number of Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||||||||
| Unvested balance at January 1 | 17,966 | $ | 190,860 | $ | ||||||||||||
| RSUs granted | 617,000 | $ | 189,286 | $ | ||||||||||||
| RSUs vested | (634,966 | ) | $ | (353,688 | ) | $ | ||||||||||
| RSUs forfeited | $ | (8,492 | ) | $ | ||||||||||||
| Unvested balance at December 31 | $ | 17,966 | $ | |||||||||||||
Stock Options and Warrants
| Number of Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2023 | 1,466 | $ | 142.50 | |||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited or expired | - | - | ||||||||||||||
| Outstanding at December 31, 2024 | 1,466 | $ | 142.50 | |||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited or expired | - | - | ||||||||||||||
| Outstanding at December 31, 2025 | 1,466 | $ | 142.50 | |||||||||||||
| Vested or expected to vest at December 31, 2025 | 1,466 | $ | 142.50 | |||||||||||||
| Exercisable at December 31, 2025 | 1,466 | $ | 142.50 | |||||||||||||
As of December 31, 2025, warrants granted to i2China Management Group, LLC, adjusted for the 1-for-5 reverse stock split of the Company’s common stock on June 30, 2025, were expired. The exercisable price of the warrant is $99.42.
The Company used the Black-Scholes option pricing model to value the above option and warrant awards to determine the grant date fair value. The contractual term of the option and warrant is years and years, respectively.
Share-Based Compensation
The RSUs, options and warrants (the “Awards”) were granted to employees and consultants with service conditions. The share-based compensation expense of the Awards for the years ended December 31, 2025 and 2024 were $ and $, respectively.
| For the Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Selling, general and administrative expenses | $ | 1,492,502 | $ | 2,728,852 | ||||
| Research and development expenses | 235,553 | 805,217 | ||||||
| Cost of revenues | 9,032 | |||||||
| Total | $ | 1,728,055 | $ | 3,543,101 | ||||
The total income tax benefit recognized in the Statements of Operations for the share-based compensation arrangements was nil for the years ended December 31, 2025 and 2024. Compensation cost capitalized as part of inventory has been minimal.
As of December 31, 2025, the total unrecognized compensation cost related to the Awards was . The total fair value of shares vested during the years ended December 31, 2025 and 2024 was $ and $, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 30, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2019 | Mar 30, 2020 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.