NOTE 5 – 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 June 30, 2026, the unamortized compensation cost related to stock options was approximately $990,185 and is expected to be recognized as expense over a weighted-average period of approximately 0.44 years.

The weighted-average grant date fair value of options granted was $2.90 and $22.50 per share for the three months ended June 30, 2026 and 2025, 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 three months ended June 30, 2026 (in thousands, except exercise price):

There were no stock options exercised during the three months ended June 30, 2026 and 2025. During the three months ended June 30, 2026 and 2025, the Company awarded 218 and 214 shares, respectively, to its non-employee directors under the Company’s outside director compensation plan. For the three months ended June 30, 2026 and 2025, the Company recorded stock-based compensation expense for these share awards of approximately $1,000 and $4,000, respectively.

A summary of restricted stock unit (RSU) activity under the Plan is presented below.

The following table summarizes the range of outstanding and exercisable options as of June 30, 2026 (in thousands, except contractual life and exercise price):

The common stock on the Company’s principal trading market over the exercise price of the option.