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STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 30, 2025
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

14. STOCK-BASED COMPENSATION

 

As of June 30, 2025, 499,683 shares of common stock and 16,000 shares of Series B Preferred Stock are available for grant under the Equity Incentive Plan. Permissible awards include incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance stock and cash-settled awards and other stock-based awards in the discretion of the Compensation Committee of the Board of Directors including unrestricted stock grants.

 

Certain equity-based RSU agreements contain a provision in which the units shall immediately vest and become converted into common shares at the rate of one share per RSU, immediately after a change in control, as defined in the award agreement.

 

Common and preferred stock RSUs

 

In February 2023, the Compensation Committee approved executive bonuses to be paid in shares of Series B Preferred Stock, with the number of shares and the amount based on specified criteria being achieved during the year 2023. During October 2023, the Compensation Committee approved the issuance of 10,000 of the above shares to one of the executives who retired. The remaining 24,000 shares were forfeited in 2024.

 

In March 2024, the Compensation Committee approved executive bonuses to be paid in shares of Series B Preferred Stock with the number of RSUs granted based on employment agreements and the amount vested based on specified criteria being achieved during the year 2024. There were 34,000 RSUs granted. During May 2024, an additional executive bonus with similar terms was approved and 12,000 shares were awarded. During December 2024, the Compensation Committee approved the award of these shares based on achievement of the specified criteria. For the three and six months ended June 30, 2025, an expense of approximately $111,000 and $219,000, respectively, was recorded. For the three and six months ended June 30, 2024, an expense of approximately $265,000 and a net benefit of approximately $443,000, respectively, was recorded. Stock compensation expense recorded is based on the value of the shares at the grant date and recognized over the service period. The portion of the stock compensation expense to be used for the payment of withholding and payroll taxes is included in accrued compensation in the condensed consolidated balance sheets. The balance of the stock compensation expense has been recorded as additional paid-in capital.

 

 

The following table summarizes the RSU transactions related to the common and preferred stock under the Company’s Equity Incentive Plan for the six months ended June 30, 2025 and 2024:

 

   Common Stock  

Series A

Preferred Stock

  

Series B

Preferred Stock

 
Outstanding and unvested shares at January 1, 2025   242,500    -    19,199 
Granted   -    -    - 
Vested   (89,700)   -    - 
Forfeited   -    -    - 
Outstanding and unvested shares at June 30, 2025   152,800    -    19,199 
                
Outstanding and unvested shares at January 1, 2024   753,495    -    57,199 
Granted   50,000    -    46,000 
Vested   (366,214)   -    (14,000)
Forfeited   (224,032)   -    (24,000)
Outstanding and unvested shares at June 30, 2024   213,249    -    65,199 

 

At June 30, 2025 there was no liability for taxes withheld in connection with the equity awards. There was a liability for taxes withheld in connection with the equity awards of approximately $6,000 at December 31, 2024 and is included in accrued compensation in the condensed consolidated balance sheet. No amounts were paid in connection with cash-settled awards during the three and six months ended June 30, 2025 and 2024.

 

Stock-based compensation expense (benefit)

 

The following table summarizes the components of share-based compensation expense (benefit) for the three and six months ended June 30, 2025 and 2024:

  

   Three Months Ended June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
   ($ in thousands) 
Direct operating costs  $-   $2   $-   $(43)
General and administrative   111    268    216    (428)
Research and development   -    (68)   3    (14)
Selling and marketing   -    63    -    42 
Total stock-based compensation expense (benefit)  $111   $265   $219   $(443)