NOTE 6 — STOCK-BASED COMPENSATION

Amended 2017 Equity Incentive Plan

In October 2017, the Company’s board of directors (the “Board”) approved the Amended and Restated 2017 Equity Incentive Plan, as amended (the “Plan”) with 33,334 shares of common stock reserved for issuance. In January 2020 and August 2021, the Board approved increases in the number of shares reserved for issuance under the Plan by 11,112 and 44,444 shares, respectively. In January 2023, February 2024, February 2025 and January 2026, the Company’s stockholders approved increases in the number of shares reserved for issuance under the Plan by an additional 66,667, 100,000, 100,000 and 100,000 shares, respectively. Under the Plan, eligible employees, directors and consultants may be granted a broad range of awards, including stock options, stock appreciation rights, restricted stock, performance-based awards and restricted stock units (“RSUs”). The Plan is administered by the Board or, in the alternative, a committee designated by the Board.

Stock-Based Compensation Expense

Stock options granted by the Company generally vest over 36 months and have a 10-year term. As of March 31, 2026, the unamortized compensation cost related to stock options was approximately $1,174,000 and is expected to be recognized as expense over a weighted-average period of approximately 0.7 years.

In April 2025, under its Two-Part FDA Submission and Product Milestone Bonus Program (the “Program”), the Company granted stock options to purchase 64,700 shares of common stock, which are subject to vesting based upon achievement of two performance milestones by the Company and continued service by the optionee. The two performance milestones set forth under the Program were (i) submission of the 510(k) to the FDA for the Pivot pump product on or before October 31, 2025 (“Milestone 1”) and (ii) validation of the manufacturing line validated for the Pivot pump product with capacity to serve 6,000 patients by March 15, 2026 (“Milestone 2”). The Company commenced expense recognition upon grant for all option shares issued under the Program based on its assessment of the probability of achievement of the applicable performance requirements. During the quarter ended December 31, 2025, outstanding Milestone 1 options for 31,516 shares vested. On March 16, 2026, outstanding Milestone 2 options for 30,787 shares were canceled, as the Company did not meet the required performance milestone.

In February 2026, the Company granted a stock option to purchase 100,000 shares of common stock (the “Performance Award”) to a consultant, which is subject to vesting based upon achievement of a performance milestone by May 1, 2026. As of March 31, 2026, the Company had not commenced expense recognition for the Performance Award based on management’s assessment of the probability of achievement of the applicable performance requirements.

The weighted-average grant date fair values of stock options granted during the years ended March 31, 2026 and 2025 was $11.85 and $39.30, respectively. The following assumptions were used in the fair-value method calculations:

The fair values of options at the grant date were estimated utilizing the Black-Scholes valuation model, which includes simplified methods to establish the fair term of options. The expected volatility is based on the historical volatility of the Company’s stock price. The risk-free interest rate was derived from the Daily Treasury Yield Curve Rates, as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of the options. A dividend yield of zero was applied because the Company has never paid dividends and has no intention to pay dividends in the foreseeable future. The Company accounts for forfeitures as they occur.

The following table summarizes the activity in the shares available for grant under the Plan during the years ended March 31, 2026 and 2025:

A summary of RSU activity under the Plan is presented below.

The total intrinsic value of RSUs outstanding as of March 31, 2026 was approximately $3,670. The unamortized compensation cost at March 31, 2026 was approximately $20,000 related to RSUs and is expected to be recognized as expense over a period of approximately 0.25 years.

The following table summarizes the range of outstanding and exercisable options as of March 31, 2026:

The intrinsic value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise price of the option at March 31, 2026.