Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

The Company has grants outstanding under two equity compensation plans. The 2007 Long-Term Incentive Compensation Plan (the "2007 Plan") and the 2007 Directors’ Incentive Plan (the "Directors’ Plan"), which were approved by shareholders, superseded the 1999 Stock Option Plan. Both plans are available for future grants of equity compensation awards to employees, consultants and directors. The 2007 Plan and the Directors’ Plan provide for the issuance of stock options, stock appreciation rights and restricted stock. Vesting is determined on a grant-by-grant basis in accordance with the terms of the plans and the related grant agreements. The Company has reserved 3.2 million shares of common stock for issuance under the 2007 Plan and 250,000 shares for issuance under the Directors’ Plan. As of December 31, 2024, the Company had 784,604 shares available for future grants under the 2007 Plan and 114,007 shares available under the Directors’ Plan.

The exercise price of stock options is generally 100% of the fair market value of the underlying common stock on the grant date, except for incentive stock options granted to 10% shareholders, which the exercise price is no less than 110% of the fair market value. The maximum contractual term of stock options is ten years from the grant date, except for incentive stock options granted to 10% shareholders, which is no more than five years.

During 2011, the Company began issuing shares of restricted stock with no exercise price to employees and directors. Restricted stock issued to employees generally cliff-vests on the fourth anniversary of the grant date. Beginning in 2021, the Company began issuing incentive stock options to employees with the same fourth anniversary cliff-vest. Restricted stock continues to be issued to directors and vests on the one year anniversary of the grant date. Restricted stock issued to advisors generally cliff-vests on the fourth anniversary of the grant date.

Stock compensation expense is presented as a component of general and administrative expense in the consolidated statements of operations. Stock compensation expense was $0.3 million and $0.4 million for the years ended December 31, 2024 and 2023, respectively.

At December 31, 2024, there was approximately $0.4 million of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted-average period of 1.76 years.

Stock Options

Stock options activity was as follows:


	Number of option shares	Weighted- average exercise price		Weighted-average remaining contractual term





Outstanding, December 31, 2022	319,650	$	3.00	6.15
Granted	192,750	2.06
Exercised	—	—
Forfeited/canceled	(25,150)	2.55
Outstanding, December 31, 2023	487,250	2.65		5.59
Granted	190,450	1.80
Exercised	—	—
Forfeited/canceled	(36,100)	2.25
Outstanding, December 31, 2024	641,600	$	2.42	5.00

The weighted-average grant-date fair value of options granted during the years 2024 and 2023 was $1.05 and $1.16 , respectively. No options were vested and exercisable at December 31, 2024. The aggregate intrinsic value of options outstanding was minimal.

The fair value of stock options is calculated using the Black-Scholes (“Black-Scholes-Merton”, or “BSM”) option-pricing model on the grant date. Since 2012, the Company had been issuing Restricted Share Awards where the grant date Fair Value (“FV”) equaled the closing share price. The assumptions used in the Black-Scholes valuation to determine the FV of stock options were as follows at December 31:


	2024		2023

Expected term (in years)	5.69		5.71
Expected volatility	67.89	%	65.87	%
Risk free interest rate	4.24	%	3.45	%
Expected dividend yield	—		—

•Expected Term - The Company has estimated the expected life of its stock options using the simplified method, whereby the expected life equals the average of the vesting term and the original contractual term of the option.

•Expected volatility - Based on the Company’s historical stock price volatility.

•Risk Free rate - The Company bases the risk-free interest rate assumption for equity awards on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

•Expected dividend yield - The Company’s expected dividend yield assumption is zero as it has never paid dividends and has no present intention to do so in the future.

Restricted Stock Awards

Restricted stock activity was as follows:


	Number of shares	Weighted-average grant-date fair value





Nonvested, December 31, 2022	395,751	4.29
Granted	34,250	1.93
Vested/released	(157,360)	5.73
Forfeited/canceled	(12,075)	3.63
Nonvested, December 31, 2023	260,566	3.14
Granted	50,500	1.71
Vested/released	(169,991)	3.37
Forfeited/canceled	(1,250)	3.56
Nonvested, December 31, 2024	139,825	2.34

The fair value of restricted stock granted was based on the closing market price of the Company’s common stock on the grant date. The fair value of restricted stock awards that vested during the years 2024 and 2023 was $0.3 million for each year. At December 31, 2024, there was approximately $0.1 million of unrecognized compensation costs related to restricted stock awards, which is expected to be recognized over a weighted-average period of less than a year. The restricted stock grants are included in the diluted weighted shares outstanding computation until they cliff-vest. Once vested they are included in the basic weighted shares outstanding computation.