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Note 16 - Stock Option and Purchase Plans | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] |
(16) | Stock Option and Purchase Plans
The Company’s stock compensation program provides for the grant of restricted stock (including performance-based restricted stock), unrestricted stock, stock options and stock appreciation rights. A total of 3,476,021 shares were registered for issuance under the 2015 Omnibus Plan. On May 12, 2020, the 2015 Omnibus Plan was replaced with the 2020 Omnibus Plan. A total of 4,596,271 shares were registered for issuance under the 2020 Omnibus Plan. Additionally, awards under the 2015 Omnibus Plans that are cancelled without having been fully exercised or vested are available again for new awards under the 2020 Omnibus Plan. The aggregate number of shares available for future grant as of December 31, 2023 and 2022 was 2,376,021 and 2,895,771, respectively. The 2015 and 2020 Omnibus Plans provide for restrictions which lapse after three years. During the restricted period, which is commensurate with each vesting period, the recipient has the right to receive dividends and voting rights for the shares. Generally, if a recipient leaves the Company before the end of the restricted period or if performance requirements, if any, are not met, the shares will be forfeited. Under the plans, the Company may grant options to purchase common stock to officers, key employees and non-employee directors. Options may be granted at not less than the market price on the date of grant. Stock option grants under the 2015 and 2020 Omnibus Plans include a five-year life along with vesting after three years of service. Compensation expense is measured based on the fair value at the date of grant and is recognized on a straight-line basis over the vesting period. Fair value for restricted shares is equal to the stock price on the date of grant, while the fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing method. The Company uses historical Company and industry data to estimate the expected price volatility. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, the Company uses the simplified method to estimate the expected term. Under the simplified method, the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The dividend yield is assumed to be zero as we have not paid dividends nor do we anticipate paying any dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. Forfeitures are recorded as they occur. Stock based compensation expense of $813,000 and $683,000 has been recorded in selling, general and administrative expense in the consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively. The following weighted average assumptions were used to estimate the fair value of options granted using the Black-Scholes option-pricing model:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |
Expected life (years) |  |  | 4.3 |  |  |  | 4.3 |
Expected volatility |  |  | 85.1 | % |  |  | 86.5 | %
Risk-free interest rates |  |  | 4.23 | % |  |  | 1.69 | %
Expected dividend yield |  |  | 0 | % |  |  | 0 | %
A summary of the restricted stock activity is as follows:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value Per Share |  |  | Weighted Average Remaining Term |  |  | Aggregate Intrinsic Value |
Nonvested shares at January 1, 2022 |  |  | 197,500 |  |  | $ | 3.16 |  |  |  |  |  |  |  |  |
Granted |  |  | 197,500 |  |  |  | 2.59 |  |  |  |  |  |  |  |  |
Vested |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  |  |
Forfeited |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  |  |
Nonvested shares at December 31, 2022 |  |  | 395,000 |  |  |  | 2.88 |  |  |  |  |  |  |  |  |
Granted |  |  | 160,000 |  |  |  | 1.97 |  |  |  |  |  |  |  |  |
Vested |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (42,500 | ) |  |  | 2.29 |  |  |  |  |  |  |  |  |
Nonvested shares at December 31, 2023 |  |  | 512,500 |  |  | $ | 2.64 |  |  |  | 1.2 |  |  | $ | 1,040,375 |
There were no shares that vested during 2023 or 2022. The following table summarizes option activity for the year ended December 31, 2023:
|  | Number of Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Term |  |  | Aggregate Intrinsic Value |
Outstanding at January 1, 2022 |  |  | 1,970,250 |  |  | $ | 1.11 |  |  |  |  |  |  |  |  |
Granted |  |  | 260,000 |  |  |  | 2.60 |  |  |  |  |  |  |  |  |
Exercised |  |  | (138,900 | ) |  |  | 1.11 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (51,000 | ) |  |  | 0.86 |  |  |  |  |  |  |  |  |
Expired |  |  | (15,500 | ) |  |  | 1.15 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2022 |  |  | 2,031,850 |  |  |  | 1.31 |  |  |  |  |  |  |  |  |
Granted |  |  | 372,750 |  |  |  | 1.97 |  |  |  |  |  |  |  |  |
Exercised |  |  | (525,600 | ) |  |  | 1.41 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (32,250 | ) |  |  | 1.31 |  |  |  |  |  |  |  |  |
Expired |  |  | (22,500 | ) |  |  | 1.50 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2023 |  |  | 1,824,250 |  |  | $ | 1.41 |  |  |  | 2.02 |  |  | $ | 1,315,300 |
Exercisable at December 31, 2023 |  |  | 1,164,500 |  |  | $ | 0.92 |  |  |  | 0.97 |  |  | $ | 1,293,175 |
The weighted average grant date fair value based on the Black-Scholes option pricing model for options granted in the years ended December 31, 2023 and 2022 was $1.26 and $1.67 per share, respectively. There were 525,600 options exercised in 2023 with an intrinsic value of $312,000. There were 138,900 options exercised in 2022 with an intrinsic value of $176,000. As of December 31, 2023, there was $1,111,000 of total unrecognized compensation cost related to unvested share-based compensation granted under the plans. That cost is expected to be recognized over a weighted-average period of 3.0 years. The total fair value of option shares vested during the years ended December 31, 2023 and 2022 was $268,000 and $285,000, respectively.

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