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CAPITAL STOCK, STOCK PLANS, WARRANTS AND STOCK BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
CAPITAL STOCK, STOCK PLANS, WARRANTS AND STOCK BASED COMPENSATION | NOTE 6 CAPITAL STOCK, STOCK PLANS, WARRANTS AND STOCK BASED COMPENSATION Stock Option Plans The Company’s 2003 Outside Directors Stock Plan, as amended (the “2003 Plan”) provides for the grant of Non-Qualified Stock Options (“NQSOs”) to member of the Company’s Board of Directors (the “Board”) who is not an employee of the Company or its subsidiaries (“Eligible Director”). The 2003 Plan also provides for the grant of an NQSO to purchase up to 10,000 shares of the Company’s Common Stock for each Eligible Director upon each re-election to the Board, and the grant of an NQSO to purchase up to 20,000 shares of the Company’s Common Stock upon initial election. NQSOs granted prior to July 20, 2021 have a vesting period of six months from the date of grant and a term of 10 years, with an exercise price equal to the closing trade price on the date prior to grant date. NQSOs granted on and after July 20, 2021 vest 25% per year, beginning on the first anniversary date of the grant and also have a term of 10 years, with an exercise price equal to the closing trade price on the date prior to grant date. Additionally, the 2003 Plan provides for the issuance to each Eligible Director a number of shares of the Company’s Common Stock in lieu of 65% or 100% (based on option elected by each director) of the fee payable to the Eligible Director for services rendered as a member of the Board. The number of shares issued is determined at 75% of the market value as defined in the plan (the Company recognizes 100% of the market value of the shares issued). At December 31, 2023, the 2003 Plan had available for issuance 318,680 shares. The Company’s 2017 Stock Option Plan, as amended (the “2017 Plan”), authorizes the grant of options to officers and employees of the Company, including any employee who is also a member of the Board, as well as to consultants of the Company. The 2017 Plan authorizes an aggregate grant of 1,740,000 NQSOs and Incentive Stock Options (“ISOs”), which included an increase of 600,000 additional authorized shares approved by the Company’s Stockholders at the Company’s 2023 Annual Meeting of Stockholders held on July 20, 2023. Consultants of the Company can only be granted NQSOs. The term of each stock option granted under the 2017 Plan shall be fixed by the Compensation and Stock Option Committee (the “Compensation Committee”), but no stock options will be exercisable more than ten years after the grant date, or in the case of an ISO granted to a 10% stockholder, five years after the grant date. The exercise price of any ISO granted under the 2017 Plan to an individual who is not a 10% stockholder at the time of the grant shall not be less than the fair market value of the shares at the time of the grant, and the exercise price of any ISO granted to a 10% stockholder shall not be less than 110% of the fair market value at the time of grant. The exercise price of any NQSOs granted under the plan shall not be less than the fair market value of the shares at the time of grant. At December 31, 2023, the 2017 Plan had available for issuance 720,500 shares. Stock Options to Employees and Outside Director On January 19, 2023, the Company granted ISOs to certain employees under the 2017 Plan, for the purchase of up to an aggregate 295,000 shares of the Company’s Common Stock. The total ISOs granted included an ISO for each of the Company’s executive officers for the purchase set forth in his respective ISO Agreement, as follows: 70,000 shares for the Chief Executive Officer (“CEO”); 40,000 shares for the Chief Financial Officer (“CFO”); 30,000 shares for the Executive Vice President (“EVP”) of Strategic Initiatives; 30,000 shares for the EVP of Waste Treatment Operations; and 30,000 shares for the EVP of Nuclear and Technical Services. Each of the ISOs granted has a contractual term of six years with one-fifth yearly vesting over a five-year period. The exercise price of each ISO is $3.95 per share, which was equal to the fair market value of the Company’s Common Stock on the date of grant. On July 20, 2023, the Company issued a NQSO to each of the Company’s seven reelected outside (non-management) directors under the 2003 Plan, for the purchase of up to 10,000 shares of the Company’s Common Stock. The CEO and EVP of Strategic Initiatives, each an executive officer of the Company as well as a director, were not eligible to receive an option under the 2003 Plan. Each NQSO granted is for a contractual term of ten years with one-fourth vesting annually over a four-year period. The exercise price of each NQSO is $9.81 per share, which was equal to the fair market value of the Company’s Common Stock on the day preceding the grant date, in accordance with the 2003 Plan. On October 19, 2023, the Company granted an ISO to an employee under the 2017 Plan, for the purchase of up to 5,000 shares of the Company’s Common Stock. The ISO granted is for a contractual term of six years with one-fifth vesting annually over a five-year period. The exercise price of the ISO is $9.62 per share, which was equal to the fair market value of the Company’s Common Stock on the date of grant. On July 21, 2022, the Company issued a NQSO to each of the Company’s seven reelected outside directors under the 2003 Plan, for the purchase of up to 10,000 shares of the Company’s Common Stock. The Company’s EVP of Strategic Initiatives and also a member of the Company’s Board, was not eligible to receive an option under the 2003 Plan as an employee of the Company. Each NQSO granted is for a contractual term of ten years with one-fourth vesting annually over a four-year period. The exercise price of the NQSO is $5.15 per share, which was equal to the fair market value of the Company’s Common Stock the day preceding the grant date, pursuant to the 2003 Plan. On July 21, 2022, the Company granted ISOs to certain employees under the 2017 Plan, for the purchase of up to an aggregate of 24,000 shares of the Company’s Common Stock. Each ISO granted is for a contractual term of six years with one-fifth vesting annually over a five-year period. The exercise price of the ISO is $5.34 per share, which was equal to the fair market value of the Company’s Common Stock on the date of grant. During 2023, the Company issued an aggregate 185,549 shares of its Common Stock from cashless exercises of options for the purchases of 280,000 shares of the Company’s Common Stock, at exercise prices ranging from $3.60 per share to $7.005 per share. Additionally, the Company issued 40,400 shares of its Common Stock from the cash exercise of options for the purchase of 40,400 shares of the Company’s Common Stock, at exercise prices ranging from at $2.785 per share to $7.005 per share resulting in proceeds of approximately $164,000. Income tax benefit associated with stock options exercised with cash during 2023 was approximately $25,000. During 2022, the Company issued 16,526 shares of its Common Stock from a cashless exercise of an option for the purchase of 50,000 shares of the Company’s Common Stock at $3.97 per share. Additionally, the Company issued 2,400 shares of its Common Stock from the exercise of an option for the purchase of 2,400 shares of the Company’s Common Stock at $5.50 per share resulting in proceeds of approximately $13,000. Income tax benefit associated with the stock option exercised with cash during 2022 was approximately $3,000. The Company estimates fair value of stock options using the Black-Scholes valuation model. Assumptions used to estimate the fair value of stock options granted include the exercise price of the award, the expected term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the option’s expected term, and the expected annual dividend yield. The fair value of the options granted during 2023 and 2022 and the related assumptions used in the Black-Scholes option model used to value the options granted were as follows: SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS
|  | 2023 |  |  | 2022 |
|  | Employee Stock Options Granted |
|  | 2023 |  |  | 2022 |
Weighted-average fair value per share |  | $ | 2.07 |  |  |  | 2.71 |
Risk -free interest rate (1) |  |  | 3.48%-4.98 | % |  |  | 3.00 | %
Expected volatility of stock (2) |  |  | 55.19%-58.78 | % |  |  | 55.72 | %
Dividend yield (3) |  |  | None |  |  |  | None |
Expected option life (years) (4) |  |  | 5.0 - 5.6 |  |  |  | 5.0 |
|  | 2023 |  |  | 2022 |
|  | Outside Director Stock Options Granted |
|  | 2023 |  |  | 2022 |
Weighted-average fair value per share |  | $ | 6.46 |  |  | $ | 3.61 |
Risk -free interest rate (1) |  |  | 3.85 | % |  |  | 2.91 | %
Expected volatility of stock (2) |  |  | 54.31 | % |  |  | 55.04 | %
Dividend yield (3) |  |  | None |  |  |  | None |
Expected option life (years) (4) |  |  | 10.0 |  |  |  | 10.0 |
(1) |  | The risk-free interest rate is based on the U.S. Treasury yield in effect at the grant date over the expected term of the option.
(2) |  | The expected volatility is based on historical volatility from our traded Common Stock over the expected term of the option.
(3) |  | The Company has never paid any dividends on its Common Stock. Our Loan Agreement prohibits the Company from paying any cash dividends without prior approval from our lender.
(4) |  | The expected option life is based on historical exercises and post-vesting data.
The following table summarizes stock-based compensation recognized (within SG&A expenses) for fiscal years 2023 and 2022. SCHEDULE OF SHARE-BASED COMPENSATION, ALLOCATION OF RECOGNIZED PERIOD COSTS
|  | 2023 |  |  | 2022 |
|  | Year Ended |
|  | 2023 |  |  | 2022 |
Employee Stock Options |  | $ | 367,000 |  |  | $ | 313,000 |
Director Stock Options |  |  | 181,000 |  |  |  | 95,000 |
Total |  | $ | 548,000 |  |  | $ | 408,000 |
Income tax benefits associated with stock-based compensation expense were approximately $45,000 and $23,000, respectively, for the years ended December 31, 2023, and 2022. At December 31, 2023, the Company had approximately $1,809,000 of total unrecognized compensation costs related to unvested options for employee and directors. The weighted average period over which the unrecognized compensation costs are expected to be recognized is approximately 3.2 years. Stock Options to Consultant On July 27, 2017, the Company granted a NQSO from the 2017 Plan to Robert Ferguson, for the purchase of up to 100,000 shares of the Company’s Common Stock (“Ferguson Stock Option”), at an exercise price of $3.65 per share, which was the fair market value of the Company’s Common Stock on the date of grant. The Ferguson Stock Option was granted in connection with Mr. Ferguson’s work as a consultant to the Company’s Test Bed Initiative (“TBI”) at our PFNWR facility. The term of the Ferguson Stock Option was seven years from the grant date, with vesting subject to the achievement of three separate milestones by certain dates, the achievement of which would entitle Mr. Ferguson to purchase, respectively, 10,000, 30,000, and 60,000 shares of the Company’s Common Stock issuable under the Ferguson Stock Option. Mr. Ferguson previously achieved the first milestone during the first vesting period. Upon the death of Mr. Ferguson, the balance of the shares issuable under the Ferguson Stock Option was forfeited in accordance with the terms of the option. Summary of Stock Option Plans The summary of the Company’s total plans as of December 31, 2023, and 2022, and changes during the period then ended are presented as follows: SCHEDULE OF STOCK OPTIONS ROLL FORWARD
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value (4) |
Options outstanding January 1, 2023 |  |  | 1,018,400 |  |  | $ | 5.02 |  |  |  |  |  |  |  |  |
Granted |  |  | 370,000 |  |  | $ | 3.15 |  |  |  |  |  |  |  |  |
Exercised |  |  | (320,400 | ) |  | $ | 3.72 |  |  |  |  |  |  | $ | 2,335,042 |
Forfeited/expired |  |  | (73,500 | ) |  | $ | 3.77 |  |  |  |  |  |  |  |  |
Options outstanding end of period (1) |  |  | 994,500 |  |  | $ | 5.57 |  |  |  | 5.0 |  |  | $ | 2,417,081 |
Options exercisable at December 31, 2023(2) |  |  | 319,300 |  |  | $ | 5.46 |  |  |  | 4.1 |  |  | $ | 766,037 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value (4) |
Options outstanding January 1, 2022 |  |  | 1,019,400 |  |  | $ | 4.91 |  |  |  |  |  |  |  | - |
Granted |  |  | 94,000 |  |  | $ | 5.20 |  |  |  |  |  |  |  |  |
Exercised |  |  | (52,400 | ) |  | $ | 4.04 |  |  |  |  |  |  | $ | 97,856 |
Forfeited/expired |  |  | (42,600 | ) |  | $ | 4.08 |  |  |  |  |  |  |  |  |
Options outstanding end of period (3) |  |  | 1,018,400 |  |  | $ | 5.02 |  |  |  | 3.8 |  |  | $ | 44,262 |
Options exercisable at December 31, 2022(3) |  |  | 530,900 |  |  | $ | 4.27 |  |  |  | 2.4 |  |  | $ | 30,962 |
(1) | Options with exercise prices ranging from $3.15 to $9.81
(2) | Options with exercise prices ranging from $3.15 to $7.50
(3) | Options with exercise prices ranging from $2.79 to $7.50
(4) | The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price
The summary of the Company’s nonvested options as of December 31, 2023, and changes during the period then ended are presented as follows: SCHEDULE OF NON VESTED OPTIONS
|  |  |  |  | Weighted Average |
|  |  |  |  | Grant-Date |
|  | Shares |  |  | Fair Value |
Non-vested options January 1, 2023 |  |  | 487,500 |  |  | $ | 3.32 |
Granted |  |  | 370,000 |  |  |  | 2.90 |
Vested |  |  | (119,300 | ) |  |  | 3.27 |
Forfeited |  |  | (63,000 | ) |  |  | 3.22 |
Non-vested options at December 31, 2023 |  |  | 675,200 |  |  | $ | 3.12 |
Warrant In connection with a $2,500,000 loan that the Company received from Mr. Robert Ferguson (the “Ferguson Loan”) on April 1, 2019, the Company issued a warrant to Mr. Ferguson (the “Ferguson Warrant”) for the purchase of up to 60,000 shares of our Common Stock at an exercise price of $3.51 per share. The Ferguson Loan was paid in full in December 2020. Upon Mr. Ferguson’s death, the Ferguson Warrant was transferred equally to Mr. Ferguson’s two heirs with each holding a Warrant for the purchase of up to 30,000 shares of the Company’s Common Stock, as permitted under the Ferguson Warrant. On December 12, 2023, one of Warrant was exercised by Mr. Ferguson’s heir for the purchase of 30,000 shares of the Company’s Common Stock, resulting in proceeds received by the Company of approximately $105,000. As of December 31, 2023, the remaining Warrant remains outstanding and will expire on April 1, 2024. Common Stock Issued for Services The Company issued a total of 65,854 and 90,920 shares of our Common Stock in 2023 and 2022, respectively, under our 2003 Plan to our outside directors as compensation for serving on our Board. As a member of the Board, each director elects to receive either 65% or 100% of the director’s fee in shares of our Common Stock. The number of shares received is calculated based on 75% of the fair market value of our Common Stock determined on the business day immediately preceding the date that the quarterly fee is due. The balance of each director’s fee, if any, is payable in cash. The Company recorded approximately $477,000 in each of the years 2023 and 2022 in compensation expense (included in SG&A expenses) for the for the portion of director fees earned in the Company’s Common Stock. Shares Reserved As of December 31, 2023, the Company has reserved approximately 994,500 shares of our Common Stock for future issuance under all of the option arrangements.

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