Reservoir Media, Inc. Stock Compensation Disclosure

NOTE 12. SHARE-BASED COMPENSATION

2021 Incentive Plan

On July 28, 2021, in connection with the Business Combination, the Company adopted the 2021 Incentive Plan, which became effective on such date. 9,726,247 authorized shares of Common Stock were reserved for issuance under the 2021 Incentive Plan. In addition, at the effective time of the Business Combination, options previously granted under the Reservoir Holdings, Inc. 2019 Long Term Incentive Plan (the “Previous RHI 2019 Incentive Plan”) to purchase shares of RHI Common Stock were converted into options to purchase 1,494,848 shares of Common Stock pursuant to the 2021 Incentive Plan.

Beginning on April 1, 2022 and ending on March 31, 2031, the aggregate number of shares of Common Stock that may be issued under the 2021 Incentive Plan will automatically increase by the lesser of (a) 3% of the total number of shares of Common Stock issued and outstanding on the last day of the preceding fiscal year on a fully diluted basis and assuming that all shares available for issuance under the 2021 Incentive Plan are issued and outstanding, or (b) such number of shares determined by the Board. As of the effective date of the 2021 Incentive Plan, no further stock awards have been or will be granted under the Previous RHI 2019 Incentive Plan, and the Previous RHI 2019 Incentive Plan is no longer in effect. As of March 31, 2026, 15,483,974 shares of Common Stock were available for the Company to grant under the 2021 Incentive Plan.

The 2021 Incentive Plan is administered by the compensation committee of the Board (the “Compensation Committee”). The exercise prices, vesting and other restrictions are determined by the Board, except that the exercise price per share of a stock option may not be less than 100% of the fair value of the Common Stock on the date of grant. Stock options awarded under the 2021 Incentive Plan typically expire 10 years after the date of the grant and generally have vesting conditions that the Compensation Committee will determine.

Share-based compensation expense totaled $4,271,714 ($3,331,970, net of taxes) and $4,385,255 ($3,414,065, net of taxes) during the fiscal years ended March 31, 2026 and 2025, respectively. Share-based compensation expense is classified as “Administration expenses” in the accompanying consolidated statements of income. As of March 31, 2026, total unrecognized compensation cost related to share-based compensation arrangements was $2,999,980, which is expected to be recognized over a weighted average period of approximately 0.8 years.

During the fiscal years ended March 31, 2026 and 2025, the Company granted RSUs to satisfy previous obligations to issue a variable number of equity awards based on a fixed monetary amount. Prior to the issuance of these RSUs, the Company classified these awards as liabilities. Upon issuance of the RSUs the awards became equity-classified as they no longer met the criteria to be liability-classified and liabilities of $1,075,407 and $802,500 were reclassified from accounts payable and accrued liabilities to additional paid-in capital during the fiscal years ended March 31, 2026 and 2025, respectively.

Restricted Stock Units

During the fiscal years ended March 31, 2026 and 2025, the Company granted RSUs to certain employees and executive officers under the 2021 Incentive Plan. RSUs are not entitled to dividends or dividend equivalents and are not considered to be participating securities. The Company records share-based compensation expense for RSUs based on their grant date fair value.

The following is a summary of RSU activity for the fiscal year ended March 31, 2026:

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Outstanding RSUs as of April 1, 2025, include 12,745 vested RSUs with a weighted average grant date fair value of $7.32. Settled RSUs in the table above include 9,638 of these RSUs vested as of April 1, 2025, which converted to common shares during the fiscal year ended March 31, 2026.

During the fiscal year ended March 31, 2026, 536,452 RSUs vested, of which 5,346 RSUs will convert to common shares at future dates. The remaining 531,106 RSUs converted to common shares during the fiscal year ended March 31, 2026 and are reflected as Settled RSUs in the table above.

Outstanding RSUs as of March 31, 2026, include 8,453 vested RSUs with a weighted average grant date fair value of $7.10, which will convert to common shares at future dates.

The total fair value, determined as of the date of vesting, of RSUs vested and settled during the fiscal years ended March 31, 2026 and 2025 was $4,023,021 and $4,490,048, respectively.

Stock Options

All stock options outstanding as of March 31, 2026 were granted under the Previous RHI 2019 Incentive Plan. Each option to acquire a share of RHI Common Stock issued under the Previous RHI 2019 Incentive Plan that was outstanding immediately prior to the consummation of the Business Combination became fully vested in accordance with the original terms of the awards. Each fully vested option was then converted into an option to purchase shares of Common Stock, with the number of shares of Common Stock subject to the options and exercise price adjusted commensurately with the Exchange Ratio of 196.06562028646. Prior to vesting, the Company recorded share-based compensation expense for stock options based on the estimated fair value of the stock options on the date of the grant using the Black-Scholes option-pricing model.

The following table is a summary of stock option activity under the 2021 Incentive Plan for the fiscal year ended March 31, 2026:

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