Note 10. Employee Benefit Plans

Stock-based compensation

The Company recognized stock-based compensation of $273,000 and $309,000 for the three months ended September 30, 2026 and 2025, respectively.

The following table sets forth the stock-based compensation expense by line item in the condensed consolidated statements of operations, (in thousands):

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Stock option plans

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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24,785 stock options were granted during the three months ended September 30, 2026. No stock options were granted during the three months ended September 30, 2025. 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 for the options granted during the three months ended September 30, 2026 and 2025, respectively:

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The following table reflects the total activity for the stock option plans for the three months ended September 30, 2026:

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The total fair value of stock options vested during the three months ended September 30, 2026 and 2025 was $239,000 and $154,000, respectively. The aggregate intrinsic value of stock options exercised during the three months ended September 30, 2026 and 2025 was $0 and $325,000, respectively. As of September 30, 2026, the total compensation cost related to nonvested awards not yet recognized was $1,435,000. There was no cash received from exercises of stock options during the three months ended September 30, 2026 and 2025, respectively.

401(k) Plan

The Company maintains a 401(k) plan (“the Plan”) that covers all U.S. employees and is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code. Company contributions to this plan are discretionary and totaled $105,000 and $70,000 for the three months ended September 30, 2026 and 2025, respectively.