Company: FGMCU
Filing Date: 2025-12-30
Form Type: S-4/A
Source: 0001104659-25-124947
Chunk: 599

Company: FG Merger II Corp.
Filing Date: 2025-12-30
Form: S-4/A
Chunk 599
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 ​     |                | 0.11 |       |            6.14 |
| Exercisable as of September 30, 2025      | ​     |                                    43,179 | ​     | $              | 0.10 |       |            6.12 |

The Company accounts for share-based compensation arrangements using a fair value method which requires the recognition of compensation expense for costs related to all share-based payments, including stock options. The fair value method requires the Company to estimate the fair value of share-based payment awards on the date of grant using an option pricing model. The Company uses the Black-Scholes pricing model to estimate the fair value of Stock Options granted that are then expensed on a straight-line basis over the vesting period. The Company accounts for forfeitures as they occur in the year of forfeiture and share-based compensation expense adjusted accordingly. Option valuation models, including the Black-Scholes option-pricing model, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant-date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, and the expected life of the award.

F- 82

The Company uses the Black-Scholes option pricing model to estimate the fair value of the Stock Options on the date of grant under the following assumptions:

| ​                                              | ​     | ​ |           ​ | ​ |
| Expected life (years)(1)                       | ​ ​ ​ | ​ |   5.0 - 6.5 | ​ |
| Risk-free interest rate(2)                     |       | ​ | 1.03 - 4.34 | % |
| Expected volatility(3)                         |       | ​ | 50.3 - 54.9 | % |
| Annual dividend yield                          |       | ​ |           0 | % |
| Weighted average fair value of options granted | ​     | $ |        0.14 | ​ |

| (1) | In accordance with SAB Topic 14, the expected life of employee stock options was estimated using the “simplified method,” as the Company has no historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The Company believes the use of the simplified method is appropriate due to the employee stock options qualifying as “plain-vanilla