The Company has stock-based compensation plans under which awards of non-qualified stock options, incentive stock options and restricted stock have been or may be granted to employees, directors and certain advisors of the Company. The stock-based compensation plan being utilized at July 31, 2026 is the 2024 Equity Incentive Plan. The 2024 Equity Incentive Plan was approved by the Company’s shareholders and became effective on August 27, 2024. This plan governs all new equity-based awards granted on or after its effective date. The 2024 Equity Incentive Plan includes a reserve of 500,000 shares authorized for issuance of awards under the plan. At July 31, 2026, a total of 55,654 shares remained available for future awards under the 2024 Equity Incentive Plan. The Company recorded total stock-based compensation expense for all plans of approximately $(0.2) million ($(0.2) million after tax effects) and $1.2 million ($0.9 million after tax effects) for the three months ended July 31, 2026 and 2025, respectively. Tax benefits were recognized for these costs at the Company’s overall effective tax rate, excluding discrete income tax benefits related to excess benefits on share-based compensation.

The Company has options outstanding under the Amended and Restated Stock Option Plan. The shareholders of the Company approved the Amended and Restated Stock Option Plan (the “Restated Option Plan”) on August 5, 2015, which extended the term of the Stock Option Plan to June 10, 2025 and increased the number of shares of common stock reserved for issuance under the plan by an additional 300,000 shares to 1,800,000 shares. On August 29, 2018, August 26, 2020, and August 30, 2022, the shareholders of the Company approved amendments to the Restated Option Plan increasing the number of shares of common stock reserved for issuance under the plan by an additional 200,000, 200,000 and 185,000 shares, respectively. At July 31, 2026, a total of 618,434 shares of common stock are reserved for issuance of outstanding stock options under the Restated Option Plan. Options outstanding under the Restated Option Plan expire in the calendar years 2026 through 2034. As of July 31, 2026, there were 192,486 unvested options under the Restated Option Plan. No further awards may be granted under the Restated Option Plan.

The 2024 Equity Incentive Plan, which replaced the Restated Option Plan, provides for the grant of options to purchase shares of the Company’s common stock to employees, directors and certain advisors of the Company at a price not less than the fair market value of the stock on the date of grant and for periods not to exceed 10 years. As of July 31, 2026, there were 185,996 unvested options under the 2024 Equity Incentive Plan.

The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of the Company’s common stock. The Company has not historically issued any dividends and does not expect to do so in the foreseeable future.

There were 172,091 options granted during the three months ended July 31, 2026 under the 2024 Equity Incentive Plan. There were 61,318 options granted during the three months ended July 31, 2025 under the 2024 Equity Incentive Plan. The grant-date fair value of options granted during the three months ended July 31, 2026 and 2025 was $0.7 million and $0.9 million, respectively. The options were granted at fair market value on the date of grant. During the three months ended July 31, 2026, the Company’s Board of Directors also approved the grant of 288,404 additional options that are contingent on stockholder approval, at the Company’s 2026 annual meeting of stockholders to be held on September 23, 2026, of an amendment to the 2024 Equity Incentive Plan increasing the number of shares authorized for issuance under the plan. Because stockholder approval of this amendment to the plan had not been obtained as of July 31, 2026, these contingent options do not have a grant date under ASC 718, and no compensation expense has been recognized for these awards. If stockholder approval of this amendment is obtained, the grant date for accounting purposes will be the date of such stockholder approval, and the fair market value of the contingent options will be measured on that date. Generally, options vest after three to five years.

Stock option compensation expense was $(0.5) million ($(0.5) million after tax effects) and $0.3 million ($0.2 million after tax effects) for the three months ended July 31, 2026 and 2025, respectively. As of July 31, 2026, the Company had approximately $0.9 million of total unrecognized compensation cost related to unvested options that are expected to vest. These unvested outstanding options have a weighted-average remaining vesting period of 1.2 years.

On August 5, 2015, the shareholders of the Company approved the Amended and Restated Stock Incentive Plan (the “Restated Incentive Plan”), which extended the term of the Company’s Stock Incentive Plan to June 10, 2025. On August 29, 2018, the shareholders of the Company approved an amendment to the Restated Stock Incentive Plan that increased the number of shares of common stock that may be issued under the Restated Incentive Plan by 100,000 shares to 450,000. The 2024 Equity Incentive Plan replaced the Restated Incentive Plan. As of August 27, 2024, no further awards may be granted under the Restated Incentive Plan. For shares issued under the Restated Incentive Plan and the 2024 Equity Incentive Plan, the associated compensation expense is generally recognized equally over the vesting periods established at the award date and is subject to the employee’s continued employment by the Company.

There were 76,920 restricted shares granted during the three months ended July 31, 2026 and 29,363 restricted shares granted during the three months ended July 31, 2025. There were 297,669 unvested restricted shares outstanding as of July 31, 2026 with a weighted average grant date fair value of $41.46.

The Company recorded compensation cost of approximately $0.4 million ($0.4 million after tax effects) and $0.9 million ($0.7 million after tax effects) related to the issuance of restricted stock awards under the Restated Incentive Plan and 2024 Equity Incentive Plan during the three months ended July 31, 2026 and 2025, respectively. As of July 31, 2026, the Company had approximately $3.2 million of total unrecognized compensation cost related to unvested awards granted under the Restated Incentive Plan and 2024 Equity Incentive Plan, which the Company expects to recognize over a weighted-average remaining period of 1.4 years.