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Note 10 - 2020 Cash Incentive Bonus Plan | 6 Months Ended
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Jun. 30, 2024
Notes to Financial Statements |
Cash Incentive Bonus Plan [Text Block] | Note 10. 2020 Cash Incentive Bonus Plan In August 2020, the Board approved the CIB Plan. The CIB Plan was established to promote the long-term success of the Company by creating an “at-risk” cash bonus program that rewards CIB Plan participants with additional cash compensation in lockstep with significant increases in the Company’s market capitalization. The CIB Plan is considered “at-risk” because CIB Plan participants will not receive a cash bonus unless the Company’s market capitalization increases significantly and certain other conditions specified in the CIB Plan are met. Specifically, CIB Plan participants will not be paid any cash bonuses unless (1) the Company completes a merger or acquisition transaction that constitutes a sale of ownership of the Company or its assets (a "Merger Transaction") or (2) the Compensation Committee of the Board (the "Compensation Committee") determines the Company has sufficient cash on hand, as defined in the CIB Plan. Because of the inherent discretion and uncertainty regarding these requirements, the Company has concluded that a CIB Plan grant date has not occurred as of June 30, 2024. CIB Plan participants will be paid all earned cash bonuses allocated under the CIB Plan in the event of a Merger Transaction. As of December 31, 2022, the Company’s independent directors were participants in the CIB Plan. However, effective March 16, 2023, the Board amended the CIB Plan to remove all independent directors as participants in the CIB Plan and the independent directors consented to such removal. The independent directors’ share of potential benefits under the CIB Plan were completely forfeited to the Company and will not be allocated to any other participant under the CIB Plan. The Company’s independent directors have not received, and as a result of such amendment will never receive, any payments under the CIB Plan. The Company’s market capitalization for purposes of the CIB Plan is determined based on either (1) the closing price of one share of the Company’s common stock on the Nasdaq Capital Market multiplied by the total issued and outstanding shares and options to purchase shares of the Company, or (2) the aggregate consideration payable to security holders of the Company in a Merger Transaction. Any warrants outstanding are excluded from the determination of market capitalization. This constitutes a market condition under applicable accounting guidance. The CIB Plan triggers a potential cash bonus each time the Company’s market capitalization increases significantly, up to a maximum $5 billion in market capitalization. The CIB Plan specifies 14 incremental amounts between $200 million and $5 billion (each increment, a “Valuation Milestone”). Each Valuation Milestone triggers a potential cash bonus award in a pre-set amount defined in the CIB Plan. Each Valuation Milestone must be achieved and maintained for no less than 20 consecutive trading days for CIB Plan participants to be eligible for a potential cash bonus award. Approximately 67% of each cash bonus award associated with a Valuation Milestone is subject to adjustment and approval by the Compensation Committee. Any amounts not awarded by the Compensation Committee are no longer available for distribution. If the Company were to exceed a $5 billion market capitalization for no less than 20 consecutive trading days, all Valuation Milestones would be deemed achieved, in which case cash bonus awards would range from a minimum of $111.4 million up to a hypothetical maximum of $289.7 million. Payment of cash bonuses is deferred until such time as (1) the Company completes a Merger Transaction, or (2) the Compensation Committee determines the Company has sufficient cash on hand to render payment (each, a “Performance Condition”), neither of which may ever occur. Accordingly, there can be no assurance that CIB Plan participants will ever be paid a cash bonus that is awarded under the CIB Plan, even if the Company’s market capitalization increases significantly. The CIB Plan is accounted for as a liability award. The fair value of each Valuation Milestone award will be determined once a grant date occurs and will be remeasured each reporting period. Compensation expense associated with the CIB Plan will be recognized over the expected achievement period for each of the 14 Valuation Milestones, when a Performance Condition is considered probable of being met. In October 2020, the Company achieved the first Valuation Milestone. Subsequently in 2020, the Compensation Committee approved a potential cash bonus award of $6.5 million in total for all CIB Plan participants (after taking into account the March 2023 CIB Plan amendment), subject to future satisfaction of a Performance Condition. During the year ended December 31, 2021, the Company achieved 11 additional Valuation Milestones triggering potential Company obligations to all CIB Plan participants from a minimum of $74.9 million up to a hypothetical maximum of $202.3 million (after taking into account the March 2023 CIB Plan amendment), to be determined, approved and allocated by the Compensation Committee and contingent upon future satisfaction of a Performance Condition. However, no compensation expense was recorded since no grant date has occurred and no Performance Conditions are considered probable of being met. There is no continuing service requirement for CIB Plan participants once the Compensation Committee approves a cash bonus award. No Valuation Milestones were achieved during the years ended December 31, 2023 and 2022 or the six months ended June 30, 2024. No actual cash payments were authorized or made to participants under the CIB Plan through the date of filing of this Form 10-Q.

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