Executive Compensation Agreements

9 Months Ended

Sep. 30, 2025

12. Executive Compensation Agreements

Restricted Stock Units

On March 31, 2025, the Company entered into five-year employment agreements with its Chief Executive Officer and Chief Financial Officer, which included grants of restricted stock units (“RSUs”) subject to both performance-based and time-based vesting conditions. The fair value of each RSU was determined based on the fair value of the Company’s common stock on the grant date.

The performance-based RSU grant consisted of 37,500 units in total, with a grant-date fair value of $71,250, which vest on December 31, 2025, contingent upon the achievement of specified performance targets. As of September 30, 2025, the Company determined that 5,250 of these RSUs are probable of vesting and is recognizing compensation expense for those units on a straight-line basis over the nine-month service period from April 1, 2025 through December 31, 2025.

The time-based RSU grant consisted of 10,000 units, which vest in five equal annual installments of 2,000 RSUs each on December 31 of each year from 2025 through 2029. The aggregate grant-date fair value of the time-based RSUs was $19,000. The Company is recognizing compensation expense for these RSUs on a straight-line basis over the 57-month vesting period beginning April 1, 2025.

For the three months ended September 30, 2025 and 2024, the Company recognized $4,325 and $0 of stock-based compensation expense related to RSUs, respectively. For the nine months ended September 30, 2025 and 2024, the Company recognized $8,650 and $0 of stock-based compensation expense related to RSUs, respectively.

As of September 30, 2025, the Company had a total of $20,325 of unrecognized compensation expense related to RSUs. This includes:

$3,325 related to 5,250 performance-based RSUs deemed probable of vesting, which is expected to be recognized over the remaining service period through December 31, 2025; and

$17,000 related to time-based RSUs, which is being recognized on a straight-line basis over the remaining 54-month vesting period ending December 31, 2029.

In addition, the Company has not recognized any compensation expense for 32,250 performance-based RSUs with a grant-date fair value of $61,275, as the related performance conditions were not considered probable of achievement as of September 30, 2025.

Cash Performance Awards

The March 31, 2025 employment agreements with the Company’s CEO and CFO also include cash performance awards payable on December 31, 2025, contingent upon the achievement of certain financial and operational performance targets. As of September 30, 2025, the Company determined that a portion of the performance conditions were probable of being met and recognized $48,875 and $80,375 of compensation expense during the three and nine months ended September 30, 2025, respectively. The maximum potential combined payout under these awards is $450,000.

STANDARD PREMIUM FINANCE HOLDINGS, INC. 10-Q