As of March 31, 2025, the Company had two equity-based compensation plans: the 2016 Equity Incentive Plan (the “2016 Plan”) and the 2024 Independent Director Stock Option and Restricted Stock Grant Plan (the “2024 Directors Plan”). These plans allow the Company to award stock options, restricted stock units and shares of restricted common stock to eligible employees, certain outside consultants and independent directors. The Company has also issued stock options, which remain outstanding as of March 31, 2025, under the 2014 Independent Director Stock Option and Restricted Stock Grant Plan and Amendment (the “2014 Directors Plan”), an equity-based compensation plan which expired in accordance with its terms on August 22, 2024. This plan allowed the Company to award stock options and shares of restricted common stock to independent directors.

On August 25, 2016, the Company’s shareholders approved the 2016 Plan, authorizing the Board of Directors to provide incentive to the Company’s officers, employees and certain independent consultants through equity-based compensation in the form of stock options, restricted stock, restricted stock units, stock appreciation rights and other stock-based awards (together, “Stock Awards”) and performance shares and performance units (together, “Performance Awards”). Awards under the 2016 Plan are limited to the authorized amount of 1,300,000 shares, up to 600,000 of which are available for issuance in connection with Performance Awards and Stock Awards. As of March 31, 2025, there were 632,905 shares available for grant under the 2016 Plan.

On August 22, 2024, the Company’s shareholders approved the 2024 Directors Plan authorizing the Board of Directors to provide incentive to the Company’s independent directors through equity-based compensation in the form of stock options and restricted stock. As of March 31, 2025, there were 604,126 shares available for grant under the 2024 Directors Plan.

On August 28, 2014, the Company’s shareholders approved the 2014 Directors Plan authorizing the Board of Directors to provide incentive to the Company’s independent directors through equity-based compensation in the form of stock options and restricted stock. Awards under the 2014 Directors Plan were limited to the authorized amount of 350,000 shares. At the 2021 Annual Meeting of Shareholders, the stockholders of the Company approved an amendment to the 2014 Directors Plan to increase the number of shares of common stock available for issuance under the plan by 300,000 shares. As of March 31, 2025, there were no shares available for grant under the 2014 Directors Plan.

The following table presents shares authorized, available for future grant and outstanding under each of the Company’s equity-based compensation plans:

Stock Options

All stock option grants made under the equity-based compensation plans were issued at exercise prices no less than the Company’s closing stock price on the date of grant. Stock options under the 2016 Plan, 2024 Directors Plan and 2014 Directors Plan (together, the “Stock Plans”) were determined by the Board of Directors or the Compensation Committee of the Board of Directors in accordance with the provisions of the respective plans. The terms of each stock option grant include vesting, exercise, and other conditions are set forth in a Stock Option Agreement evidencing each grant. No stock option can have a life in excess of ten (10) years. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option pricing model. The model requires various assumptions, including a risk-free interest rate, the expected term of the stock options, the expected stock price volatility over the expected term of the stock options, and the expected dividend yield. Compensation expense for employee stock options is recognized ratably over the vesting term. Compensation expense recognized for options issued under the Stock Plans was $54,000 and $98,000 for the fiscal years ended March 31, 2025 and 2024, respectively.

A summary of option activity under the Stock Plans for the fiscal years ended March 31, 2025 and 2024 are presented below:

The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $0.35 and $0.29 as of  March 31, 2025 and 2024, respectively. No stock options were exercised during fiscal year 2025 or 2024.

A summary of the Company’s non-vested options for the year ended March 31, 2025 is presented below:

The weighted average grant-date fair value of stock options granted during fiscal years 2025 and 2024 was $8,000 and $24,000, respectively. The total grant-date fair value of stock options that vested during fiscal years 2025 and 2024 were $96,000 and $99,000, respectively.

The following table summarizes the weighted average characteristics of outstanding stock options as of March 31, 2025:

The range of fair value assumptions and other information related to options granted during the fiscal years ended March 31, 2025 and 2024 were as follows:

Total unrecognized stock-based compensation expense related to all unvested stock options was $35,000 and $58,000 at March 31, 2025 and 2024, respectively, which is expected to be expensed over a weighted average period of 1.7 years and 1.3 years, respectively.

Restricted Stock

Grants of fully vested restricted stock issued to Non-Employee Directors during fiscal years 2025 and 2024 was 116,049 and 159,493 shares, respectively. Compensation expense recognized for fully vested restricted stock grants issued under the 2024 Directors Plan and 2014 Directors Plan was $94,000 and $126,000 for the fiscal years ended March 31, 2025 and 2024, respectively.

To reduce the Company’s ongoing cash expenses, the Nominating and Corporate Governance Committee of the Board of Directors adopted a resolution allowing each director to elect to receive his or her quarterly director fees in the form of restricted stock in lieu of cash. One Board member elected to receive shares of restricted stock in lieu of cash for prior and current year’s quarterly board fees and on September 10, 2024, a total of 66,667 shares of fully vested restricted stock were issued. One Board member elected to receive shares of restricted stock in lieu of cash for the second quarter of fiscal 2025 and on October 1, 2024, 13,158 shares of fully vested restricted stock were issued. For the fiscal year ended March 31, 2025, compensation expense of $20,000 was recognized for the current year’s quarterly board fees. Compensation expense related to these prior year’s quarterly board fees were recognized in fiscal year ended 2024 in the amount of $40,000.

Two Board members elected to receive shares of restricted stock in lieu of cash for the third fiscal quarter of 2023 and one Board member elected to receive shares of restricted stock in lieu of cash for the second fiscal quarter of 2024. On April 3, 2023, 17,672 shares of fully vested restricted stock were issued to the two Board members with compensation expense earned and recognized for these fully vested restricted stock grants in the amount of $15,500 in the fiscal year ended March 31, 2023. On October 13, 2023, 12,821 shares of fully vested restricted stock were issued to one Board member with $10,000 of compensation expense recognized in fiscal year ended March 31, 2024.

Restricted Stock Units

RSUs are service-based awards granted to eligible employees under our 2016 Plan.  RSUs represents a right to one share of the Company’s common stock upon vesting. The RSUs are not entitled to voting rights until vested and generally vest over a one-to-three-year period, subject to the employees’ continued employment with the Company on each vesting date. The fair value of RSUs is based on the closing price of the Company’s common stock on the date of the grant and is amortized to share-based compensation expense over the estimated life of the award, generally the vesting period. Compensation expense recognized for RSUs issued under the 2016 Plan was $79,000 and $124,000 for the years ended March 31, 2025 and 2024, respectively.

The following table summarizes information related to awarded RSUs:

Total unrecognized stock-based compensation expense related to unvested restricted stock units was $25,000 and $98,000 as of  March 31, 2025 and 2024, respectively, which is expected to be expensed over a weighted average period of 0.4 years and 1.2 years, respectively.