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Note 12 - Stockholders' Equity

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Shareholders' Equity and Share-Based Payments [Text Block]

12. STOCKHOLDERS’ EQUITY

Common Stock Issuances

From February of 2016 to April of 2021, we sold the aggregate of 4,553,017 shares of common stock in six different transactions raising gross proceeds of $26,714,403 at the weighted average price of $5.87 per share. These funds have been essential to funding our business growth plans.

On April 9, 2024, our shelf registration on Form S-3 relating to the offer, issuance and sale by the Company of up to $20,000,000 of securities was declared effective by the Securities and Exchange Commission (SEC). Also on April 9, 2024, we entered into an At-The-Market (ATM) Agreement with Craig-Hallum Capital Group LLC, pursuant to which we may offer and sell up to $11,000,000 of shares of our common stock. Net proceeds through December 31, 2024 from 1,228,227 shares sold pursuant to the ATM Agreement (net of the upfront legal, accounting and other fees), less sales commissions of $139,562, were $4,356,188. Net proceeds during the nine-month period ended September 30, 2025 from 63,230 shares sold pursuant to the ATM Agreement (net of legal, accounting and other fees), less sales commissions of $10,489, were $281,446.

Stock Option Plans

In June of 2010, our stockholders approved the 2010 Stock Option and Incentive Plan (the “2010 Plan”), under which employees and certain service providers could be granted options to purchase shares of the Company’s common stock at no less than fair market value on the date of grant. At that time, 300,000 shares of common stock were reserved for issuance under the 2010 Plan. Awards of stock options were determined by the Compensation and Stock Option Committee of the Board of Directors on a case-by-case basis. All options granted under the 2010 Plan expire no later than 10 years from the date of grant. The 2010 Plan expired in March of 2020, after which date no further options could be granted under the 2010 Plan. However, options outstanding under the 2010 Plan at that time can be exercised in accordance with their terms. As of September 30, 2025 and December 31, 2024, there were 145,500 and 183,500 options, respectively, outstanding under the 2010 Plan.

In June of 2017, our stockholders approved the 2017 Stock Option and Incentive Plan (the “2017 Plan”), under which employees and certain service providers may be granted options to purchase shares of the Company’s common stock at no less than fair market value on the date of grant. At that time, 300,000 shares of common stock were reserved for issuance under the 2017 Plan. In June of 2022, the stockholders approved an amendment to the 2017 Plan increasing the number of shares reserved for issuance under the 2017 Plan from 300,000 shares to 650,000 shares. This increase was approved by a vote of stockholders at the Annual Meeting of Stockholders in June of 2022. Awards of stock options are determined by the Compensation and Stock Option Committee on a case-by-case basis. All options granted under the 2017 Plan expire no later than 10 years from the date of grant. The 2017 Plan expires in March of 2027, after which date no further options can be granted under the 2017 Plan. As of September 30, 2025 and December 31, 2024, there were 517,000 and 480,500 options, respectively, outstanding under the 2017 Plan, and at September 30, 2025 100,000 shares remained available for future stock option grants under the 2017 Plan.

Subsequent Developments

The Board of Directors, on November 7, 2025, adopted a new 2025 Stock Option and Incentive Plan (the “2025 Plan”), under which employees, directors and other service providers may be granted options to purchase shares of the Company’s common stock at no less than fair market value on the date of grant. At that time, 500,000 shares of common stock were reserved for issuance under the 2025 Plan. The Board intends to submit the 2025 Plan to stockholders for approval at the 2026 Annual Meeting of Stockholders. If for any reason the 2025 Plan is not approved by vote of the Company’s stockholders within 12 months after the date of the Plan’s adoption by the Board, then with limited exceptions all stock options previously granted under that Plan would, by their terms and consistent with Nasdaq Listing Rules, lapse and become non-exercisable.

In September 2025, the Board of Directors authorized the award of stock options, in two separate installments, to Mr. te Boekhorst as a material inducement to accept employment by the Company as President and Chief Executive Officer. The first installment was granted to him by the Compensation and Stock Option Committee on September 16, 2025 (concurrent with his signing an offer letter setting out preliminary terms of employment). That award was in the form of non-qualified stock options for 75,983 shares of the Company’s common stock, with an exercise price of $5.90 per share. The second award is a mix of incentive stock options and non-qualified options granted by the Compensation and Stock Option Committee on November 7, 2025 under the 2025 Stock Option Plan, and was for 74,277 shares of common stock at an exercise price of $6.10 per share. These two awards met the conditions of an inducement award under Nasdaq Listing Rule 5635(c) and thus are exempt from the stockholder approval requirements under that Rule.

Activity under the stock option plans described above was as follows:

										Non-qualified				Weighted Average				Aggregate
		2010 Plan				2017 Plan				Stock Options				Exercise Price				Intrinsic Value⁽¹⁾
Outstanding as of December 31, 2023			188,500				430,000				—			$	6.82			$	(1,071,121	)
Grants			—				86,000				—			$	3.91
Terminations/forfeitures⁽²⁾			(5,000	)			(35,500	)			—			$	6.55
Exercises			—				—				—			$	—
Outstanding as of December 31, 2024			183,500				480,500				—			$	6.46			$	(870,558	)
Grants			—				132,000				75,983			$	5.67
Terminations/forfeitures⁽²⁾			(38,000	)			(80,500	)			—			$	6.72
Exercises			—				(15,000	)			—			$	4.81
Outstanding as of September 30, 2025			145,500				517,000				75,983			$	6.23			$	14,200
Vested as of September 30, 2025			145,500				176,000				—			$	7.39			$	(365,817	)
Vested and expected to vest as of September 30, 2025			145,500				517,000				75,983			$	6.23			$	14,200
Reserved for future grants			—				100,000				—

⁽¹⁾	Intrinsic value is the difference between the fair market value of the underlying common stock as of the date indicated and as of the date of the option grant (which is equal to the option exercise price).

⁽²⁾	Terminations and forfeitures are recognized when they occur.

The following table displays additional information about the stock option plans described above:

						*Weighted Average*
						*Fair Value at*				*Weighted Average*
		*Number of Shares*				*Grant Date*				*Exercise Price*
Non-vested stock options outstanding as of September 30, 2025			416,983			$	2.76			$	5.34
Non-vested stock options outstanding as of December 31, 2024			344,000			$	3.12			$	6.25
Stock options granted during the nine-month period ended September 30, 2025			207,983			$	3.02			$	5.67
Stock options that vested during the nine-month period ended September 30, 2025			107,000			$	4.36			$	8.07
Stock options that were terminated or forfeited during the nine-month period ended September 30, 2025			118,500			$	3.68			$	6.72

During the three-month period ended September 30, 2025, no stock options were exercised. During the nine-month period ended September 30, 2025, one director exercised stock options covering 15,000 shares by the surrender of 11,470 shares of common stock with a fair market value of $72,146 at the time of exercise and the payment of $3.70 in cash. The aggregate intrinsic value of options exercised during the nine-month period ended September 30, 2025, and the year ended December 31, 2024, approximated $22,200 and $0, respectively. No stock options were exercised during the three-month and nine-month periods ended September 30, 2024. The weighted average remaining life of the options outstanding as of September 30, 2025 was approximately 5 years and 5 months. The weighted average remaining life of the options exercisable under these plans as of September 30, 2025 was approximately 3 years and 5 months. The exercise price of the options outstanding under these plans as of September 30, 2025, ranged from $3.60 to $10.04 per share. The weighted-average grant date fair values of options granted during the nine-month periods ended September 30, 2025 and 2024 were $3.02 and $1.72 per share, respectively. As of September 30, 2025, total unrecognized stock-based compensation related to non-vested stock options aggregated $717,859 which will be recognized over a weighted average remaining period of approximately 1 year and 10 months. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model, for the purpose discussed in Note 2(n), with the following weighted-average assumptions:

		*During the Three-Month*								*During the Nine-Month*
		*Periods Ended September 30,*								*Periods Ended September 30,*
		*2025*				*2024*				*2025*				*2024*
Risk-free interest rate⁽¹⁾			3.70	%			3.48	%			3.82	%			3.70	%
Dividend yield⁽²⁾			0	%			0	%			0	%			0	%
Expected volatility⁽²⁾			55	%			52	%			53	%			51	%
Expected life in years⁽³⁾			6.1				4.1				5.7				4.3

⁽¹⁾	The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected option term.

⁽²⁾	The dividend yield and expected volatility are derived from averages of our historical data.

⁽³⁾	The expected life is calculated utilizing the simplified method, which uses the mid-point between the weighted average vesting period and the contractual term as the expected life.

Common Stock Rights Plan

In September of 1995, our Board of Directors adopted a Common Stock Rights Plan (the “Rights Plan”) and declared a dividend of one common share purchase right (a “Right”) for each of the then outstanding shares of the common stock of the Company. Each Right entitled the registered holder to purchase from the Company one share of common stock at an initial purchase price of $70.00 per share, subject to adjustment. The description and terms of the Rights were set forth in a Rights Agreement between the Company and Equiniti Trust Company, LLC, as Rights Agent. At various times over the years, our Board of Directors, which has the authority to amend the Rights Plan, voted to authorize amendments to the Rights Plan to extend the expiration date of the Rights Plan. During 2024, our Board of Directors determined not to further extend the Rights Plan because these plans are generally considered not to be stockholder friendly. With no further extension, the Rights Plan expired as of September 19, 2024. No shares were issued under the Rights Plan while it was in effect.