(9)    Share-Based Payments

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide services in exchange for the award, the requisite service period (usually the vesting period). The Company provides an estimate of forfeitures at initial grant date. Reductions in compensation expense associated with the forfeited options are estimated at the date of grant, and this estimated forfeiture rate is adjusted periodically based on actual forfeiture experience. The Company uses the Black-Scholes option pricing model to determine the fair value of the stock options granted.

During the quarters ended March 28, 2026 and March 29, 2025, a total of 0 and 115,000 stock options, respectively, were granted to employees under the Company’s 2020 Equity Incentive Plan (the “Plan”) and a total of 0 and 75,000 stock options, respectively, were granted to outside directors during the quarters ended March 28, 2026 and March 29, 2025.

During the quarters ended March 28, 2026 and March 29, 2025, there were 19,000 and 0 options exercised, respectively.  

During the quarters ended March 28, 2026 and March 29, 2025, there were 0 and 45,000 options expired and 2,750 and 0 options forfeited, respectively.

During the quarters ended March 28, 2026 and March 29, 2025, the Company repurchased 671 and 0 shares, respectively for employees to facilitate their exercise of stock options.

There were also 1,046,050 options outstanding at a weighted average price of $2.49 with a weighted average remaining contractual term of 6.8 years as of March 28, 2026 and there were 680,475 shares exercisable at a weighted average price of $2.47 with a weighted average remaining term of 6.3 years.  There were 1,083,300 options outstanding at a weighted average price of $2.45 with a weighted average remaining contractual term of 7.6 years as of March 29, 2025 and there were 581,900 shares exercisable at a weighted average price of $2.37 with a weighted average remaining term of 6.7 years. The Plan, as amended, is authorized to issue 1,500,000 shares of common stock. As of March 28, 2026, there were 418,370 shares available for future grants.

As of March 28, 2026, there was $418 thousand of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan; that cost is expected to be recognized over a weighted average period of 1.81 years.

During the quarters ended March 28, 2026 and March 29, 2025, the Company recognized approximately $48 thousand and $122 thousand, respectively, as shared-based compensation expense related to previously granted shares under the Plan.