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Note 8 - Stock-based Incentive Plans | 9 Months Ended
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Sep. 30, 2024
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | 8. STOCK-BASED INCENTIVE PLANS Restricted Stock In 2016, the Company’s stockholders approved the Natural Health Trends Corp. 2016 Equity Incentive Plan (the “2016 Plan”) to replace its 2007 Equity Incentive Plan. The 2016 Plan allows for the grant of various equity awards including incentive stock options, non-statutory options, stock, stock units, stock appreciation rights and other similar equity-based awards to the Company’s employees, officers, non-employee directors, contractors, consultants and advisors of the Company. Up to 2,500,000 shares of the Company’s common stock (subject to adjustment under certain circumstances) may be issued pursuant to awards granted. At September 30, 2024, 1,129,047 shares remained available for issuance under the 2016 Plan. The following table summarizes the Company’s restricted stock activity under the 2016 Plan:
|  | Shares |  |  | Wtd. Avg. Price at Date of Issuance |
Nonvested at December 31, 2023 |  |  | 62,320 |  |  | $ | 4.84 |
Vested |  |  | (22,768 | ) |  | $ | 4.84 |
Forfeited |  |  | (3,698 | ) |  | $ | 4.84 |
Nonvested at September 30, 2024 |  |  | 35,854 |  |  | $ | 4.84 |
Share-based compensation expense of $34,000 and $38,000 was recognized during the three months ended September 30, 2024 and 2023, respectively, and $109,000 and $123,000 was recognized during the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, total unrecognized share-based compensation expense related to non-vested restricted stock was $167,000, which is expected to be recognized over a weighted-average period of 0.7 years. Phantom Equity In 2021, the Company’s Board of Directors approved and adopted a Phantom Equity Plan (the “Phantom Plan”). Under the terms of the Phantom Plan, the Board of Directors' Compensation Committee may grant to the Company’s employees, officers, directors, contractors, consultants, or advisors awards of phantom shares entitling grantees the right to receive a cash payment equal to the fair market value of an equal number of shares of the Company’s common stock upon the close of a vesting period, subject to any maximum payment value that the Compensation Committee may set. The vesting of phantom shares is subject to such vesting conditions as the Compensation Committee may specify in a grantee’s award agreement. Grantees of phantom shares shall not by virtue of their receipt of phantom shares have any ownership rights in shares of the Company’s common stock. The Phantom Plan shall continue for a period of ten years, after which no further phantom shares may be awarded (although any phantom shares awarded prior to the expiration of such 10-year period shall be unaffected by the termination of the Phantom Plan). On February 7, 2023, the Company granted 212,937 phantom shares to certain of the Company’s employees and its non-employee directors. The phantom shares vest in eight equal three-month vesting increments, subject to the satisfaction of both a time-based vesting condition and a performance vesting condition. Both of these vesting conditions were deemed satisfied on the grant date for the initial vesting increment. In order for the time-based vesting condition to be satisfied for each vesting period, the grantee must remain continuously employed by, or be otherwise continuously providing services to, the Company through the end of the vesting period, and in order for the performance vesting condition to be satisfied for each performance period, the performance criteria designated by the Compensation Committee must be satisfied. The initial performance vesting condition will be designated by the Compensation Committee and will apply to all future performance periods, unless the Compensation Committee elects to change the performance vesting condition on a prospective basis. Future changes to the performance vesting condition must be made on or before the fifteenth day of any future performance period. If either vesting condition is not satisfied for a vesting date, then the phantom shares scheduled to vest on such date will be forfeited. These phantom shares are subject to a maximum payment value of $12.00 per phantom share. Of the phantom shares awarded in 2023, 159,702 phantom shares vested, 26,618 remain unvested, and 26,617 were forfeited as of September 30, 2024. The phantom share awards are accounted for as liabilities in accordance with FASB ASC Topic 718, Compensation – Stock Compensation since they require cash settlement. The grant date of each vesting increment will be established when the Company and the grantees reach a mutual understanding of the key terms and conditions of an award, which is the date upon which each performance vesting condition is communicated to the grantees. Compensation expense is recognized over the requisite service period if it is probable that the performance vesting condition will be achieved. The fair value of the liability incurred is remeasured at the end of each reporting period with any changes in fair value recognized as compensation expense over the requisite service period. As a result of the vesting of phantom shares, the Company recognized compensation expense related to the cash settlement of such shares of $181,000 and $144,000 during the during the three months ended September 30, 2024 and 2023, respectively, and $362,000 and $404,000 during the nine months ended September 30, 2024 and 2023, respectively.

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