NOTE 10 - Stock Options

The Company recognized stock-based compensation of $989,000, $1,513,000 and $1,733,000 for the fiscal years ended June 30, 2026, 2025 and 2024, respectively. Stock-based compensation is included in Selling, General and Administrative expense in the consolidated statements of income.

The Company has five stock option plans, two of the plans are available to grant stock options to employees (“Employee Plans”), and three of the plans are available to issue stock options to non-employee directors and consultants (“Non-Employee Plans”).

The Employee Plans provide for the Company to grant stock options, which are intended to qualify as incentive stock options (“ISOs”) or non-incentive stock options. Plan participants who are granted ISOs and possess more than 10% of the voting rights of the Company’s outstanding common stock must be granted options with an exercise price of at least 110% of the fair market value on the date of grant. Options granted under the Employee Plans have a term of up to 10 years, from date of grant, at an exercise price equal to or greater than the fair market value on the date of grant. The Employee Plans provide a cash-less exercise option for the participants, and options granted vest in full upon a “change in control” as defined in the plans.

The Non-Employee Plans provide for the grant of stock options with a term of up to 10 years, from date of grant, at an exercise price equal to or greater than the fair market value on the date of grant. The Non-Employee Plans provide a cash-less exercise option for the participants, and options granted vest in full upon a “change in control” as defined in the plans.

The following table reflects provisions of each of the stock option plans:

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The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

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The risk-free interest rate is based on U.S. government issues with a remaining term equal to the expected life of the stock options. The determination of expected volatility is based on historical volatility of the Company’s' common stock over the period commensurate with the expected term of stock options. The weighted average expected term was determined based on the historical employee exercise behavior of the options. The weighted-average fair value of stock options granted during the years ended June 30, 2026 and 2024 were $16.96 and $21.29, respectively.

The following table reflects the total activity for the stock option plans for the Year ended June 30, 2026, 2025 and 2024:

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As of June 30, 2026, the total compensation cost related to nonvested awards not yet recognized was $1,283,000.

There were 25,000 and 130,000 stock options granted during the fiscal years ending June 30, 2026 and 2024. There were no stock options granted during the year ending June 30, 2025.

The total fair value of stock options vested was $1,504,000, $1,582,000 and $1,777,000 during the fiscal years ended June 30, 2026, 2025 and 2024, respectively. The aggregate intrinsic value of stock options exercised was $5,479,000, $67,000 and $4,113,000 during the fiscal years ended June 30, 2026, 2025 and 2024, respectively. Cash received from exercises of stock options was $628,000, $54,000 and $427,000 during the fiscal years ended June 30, 2026, 2025 and 2024, respectively.