NOTE 8 - STOCK INCENTIVE PLANS

2023 Stock Incentive Plan

On March 7, 2023, the Company’s stockholders approved the 2023 Stock Incentive Plan (“2023 Plan”). The aggregate maximum number of shares of Common Stock that may be issued under the 2023 Plan was 92 shares for the 2023 fiscal year; thereafter, the maximum number is limited to 15% of the outstanding shares of Common Stock, calculated on the first business day of each fiscal quarter. As of March 31, 2026, the maximum number of shares of Common Stock that may be issued under the 2023 Plan is 187,277. Under the 2023 Plan, options which are forfeited or terminated, settled in cash in lieu of shares of Common Stock, or settled in a manner such that shares are not issued, will again immediately become available to be issued. If shares of Common Stock are withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of Common Stock will be treated as shares that have been issued under the 2023 Plan and will not again be available for issuance.

Stock Options

During the three months ended March 31, 2026, the Company issued an aggregate of 700 stock options under the 2023 Plan, vesting over a period of four years to an employee with an exercise price of $0.70 per share in consideration for services provided to the Company. As of March 31, 2026, the unrecognized compensation cost related to non-vested stock options was $63.9 thousand.    

During the three months ended March 31, 2025, the Company issued 124 stock options vesting over a period of four years to employees with an exercise price of $1,125.00 per share. In addition, 36 fully vested stock options were granted to four non-employee directors at an exercise price of $1,125.00 per share. The aggregate fair value of the shares issued to the directors was $39.3 thousand. As of March 31, 2025, the unrecognized compensation cost related to non-vested stock options was $0.6 million. 

During the three months ended March 31, 2026, 700 stock options were forfeited by participants under the 2023 Plan. During the three months ended March 31, 2025, 1 stock option was forfeited by participants and 1 stock option was cancelled under the 2023 Plan.

Restricted Stock

During the three months ended March 31, 2026, the Company granted no shares of restricted Common Stock under the 2023 Plan to employees and consultants, in accordance with the terms of the applicable employment and consulting agreements with the Company. The unamortized compensation cost as of March 31, 2026, related to all outstanding restricted stock was $0.4 million.

During the three months ended March 31, 2025, the Company granted 250 shares of restricted Common Stock under the 2023 Plan to five employees and consultants, in accordance with the terms of the applicable employment and consulting agreements with the Company. Such shares vest over four years commencing on January 2, 2025, with a quarter to vest on the anniversary of the grant, and thereafter in quarterly amounts until the entire award has vested, so long as each remains in the service of the Company. The fair value of restricted stock granted was $0.3 million and the unamortized compensation cost as of March 31, 2025, related to all outstanding restricted stock was $0.4 million.

The following table summarizes the Company’s restricted stock awards unvested as of March 31, 2026 and March 31, 2025

Stock Option Modification

During the three months ended March 31, 2026, the Company had no cancellations resulting in a modification date.

During the three months ended March 31, 2025, the Company cancelled 2 outstanding stock options under the 2023 Plan, the 2017 Stock Incentive Plan and the 2013 Long-Term Stock Incentive Plan and granted new stock options under the 2023 Plan which resulted in a new exercise price of $1,125.00 per share and the issuance of 116 stock options. The new stock options continued to vest based on the original vesting schedule that had been attributable to the cancelled stock options. This resulted in an incremental stock-based compensation expense of $69.4 thousand recorded as of the modification date.

Stock-based Compensation Expense 

Total stock-based compensation expense during three months ended March 31, 2026 and 2025 pertaining to awards under the 2023 Plan amounted to $79.8 thousand and $0.5 million, respectively.