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Share based Compensation

9 Months Ended

Sep. 30, 2025

Share based Compensation

Share-based Compensation

12. Share-based Compensation

Share-based compensation (including RSAs) represents both stock option-based expense and stock grant expense. The following table sets forth the composition of stock compensation expense included in general and administrative expense for the periods then ended:

		SEPTEMBER 30,								SEPTEMBER 30,
		2025				2024				2025				2024
		(Unaudited)
Restricted share-based compensation expense		$	108,369			$	173,881			$	416,778			$	900,842
Non-qualified option share-based compensation expense			45,742				28,703				102,210				85,483

Total share-based compensation before taxes		$	154,111			$	202,584			$	518,988			$	986,325

Restricted Stock

The Company records the fair value of all restricted stock shares based on the grant date fair value and amortizes stock compensation on a straight-line basis over the vesting period. Restricted stock shares are issued when vested and included in the total number of common shares issued and outstanding. During the three and nine month period ended September 30, 2025, the Company granted 71,291 restricted stock awards. There were no restricted stock awards granted during the three and nine month periods ended September 30, 2024.

Stock Options.

The Company estimates the fair value of nonqualified stock awards using a Black-Scholes Option Pricing model (“Black-Scholes model”). The fair value of each stock award is estimated on the date of grant using the Black-Scholes model, which requires an assumption of dividend yield, risk free interest rates, volatility, and expected option life. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatilities are based on the historical volatility of our common stock over the expected option term. The expected term of options granted is calculated using the simplified method. The Company recognizes forfeitures as they occur. There were 120,000 stock option awards granted during the nine month period ended September 30, 2025. There were no stock option awards granted during the nine month period September 30, 2024.

For the three and nine month periods ended September 30, 2025, the weighted-average grant date fair value per option was $1.89. Option pricing model assumptions for NQSO awards granted were valued using the following assumptions for the period then ended as set forth below:

		THREE MONTHS ENDED								NINE MONTHS ENDED
		SEPTEMBER 30,								SEPTEMBER 30,
		2025				2024				2025				2024

Expected dividend yield			0	%			--				0	%			--
Expected volatility			62.6	%			--				62.6	%			--
Risk-free interest rate			3.8	%			--				3.8	%			--
Term		4.5 years					--			4.5 years					--

At September 30, 2025, the Company had approximately $0.7 million of total unrecognized share-based compensation expense related to share-based compensation that will be recognized over the weighted average remaining period of 1.2 years.

Long-Term Incentive Plan

The Company maintains a long-term incentive plan (LTIP) that covers the period of January 1, 2023 through January 1, 2026. The LTIP has two components of equity-based compensation. The first is 250,000 RSAs that were granted to members of management on April 2, 2024 and vested 33% on the date of grant and 33% on January 1, 2025 with the remainder to vest on January 1, 2026, subject to continued service. The estimated fair value of these RSAs of $640,500 will be recorded over the service period. The second is 250,000 Performance- based Restricted Stock Units (PSRUs) that would vest upon meeting certain revenue or adjusted EBITDA performance targets through December 31, 2025, subject to continued service. The estimated fair value of these PRSUs of $640,500 will be recorded if and when the Company concludes that it is probable that either performance condition will be achieved.