Note 9 – Stock Plans and Share-Based Payments

The fair value of stock options and restricted stock is recognized as stock-based compensation expense in the Company’s condensed statement of operations. The Company calculates stock-based compensation expenses in accordance with ASC 718. The fair value of stock-based awards is amortized over the vesting period of the award.

Stock Options

The Company granted stock options to purchase 42,500 shares of common stock to employees and board members during the six months ended June 30, 2026. The fair value of the stock options granted during the six months ended June 30, 2026, was approximately $0.1 million.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The below assumptions for the risk-free interest rates, expected dividend yield, expected lives and expected stock price volatility were utilized for the stock options granted during six months ended June 30, 2026.

 Schedule of Fair Value Assumptions 

The Company granted stock options to purchase 205,075 shares of common stock to employees and board members during the six months ended June 30, 2025. Of the stock options granted in the six months ended June 30, 2025, 146,114 are stock options with service based vesting conditions and, as such, are being expensed over the respective service period. The remaining 58,961 stock options contain a performance condition that is not probable and therefore have no expense recognized as of June 30, 2026. The fair value of the stock options granted during the six months ended June 30, 2025, was approximately $0.2 million.

Stock-based compensation expense related to stock options was approximately $59,000 and $71,000 for the three months ended June 30, 2026 and 2025, respectively. For the three months ended June 30, 2026, approximately $56,000 and $3,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed statement of operations. For the three months ended June 30, 2025, approximately $68,000 and $3,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed statement of operations.

Stock-based compensation expense related to stock options was $117,000 and $137,000 for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, approximately $112,000 and $5,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed statement of operations. For the six months ended June 30, 2025, approximately $132,000 and $5,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed statement of operations.

As of June 30, 2026, there was $346,000 of total unrecognized compensation expense related to unvested stock-based awards granted under the equity compensation plans, which will be amortized over the weighted average remaining requisite service period of 2.1 years. This does not include approximately $60,000 of unrecognized compensation related to the vesting conditions of 58,961 options that are not probable to be achieved as of June 30, 2026.

Restricted Stock

Total stock-based compensation expense for restricted stock on the Company’s condensed statement of operations was approximately $2,000 and zero for the three months ended June 30, 2026 and 2025, respectively, which was included in selling, general and administrative expenses in the accompanying statement of operations.

Total stock-based compensation expense for restricted stock was approximately $4,000 and $10,000 for the six months ended June 30, 2026, and 2025, respectively. During the six months ended June 30, 2026, 7,184 shares of restricted stock were issued to board members related to services rendered during the year ended December 31, 2025 or the quarter ended March 31, 2026. As a result of the issuance of the 7,184 shares of restricted stock, approximately $17,000 of expense previously in accrued expenses was reclassified to additional paid-in capital during the six months ended June 30, 2026. All restricted shares issued during the six months ended June 30, 2026 vested at issuance. During the six months ended June 30, 2025, 55,659 shares of restricted stock were issued to board members related to services rendered during the year ended December 31, 2024. As a result of the issuance of the 55,659 shares of restricted stock, approximately $72,000 of expense previously in accrued expenses was reclassified to additional paid-in capital during the during the six months ended June 30, 2025. All restricted shares issued during the six months ended June 30, 2025, vested at issuance.

As of June 30, 2026, there was no unrecognized compensation expense related to unvested stock-based awards granted under the equity compensation plans.