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Note 9 - Shareholders' Equity
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Equity [Text Block]

9. SHAREHOLDERS’ EQUITY

 

At September 30, 2023, the Company had 25,506,570 shares of common stock outstanding and 245,000,000 authorized. In addition, as of September 30, 2023, the Company had 5,000,000 authorized but unissued shares of preferred stock. During the nine months ended September 30, 2023, the Company paid $241 thousand to repurchase 163,300 shares of common stock as part of a share repurchase plan. On January 5, 2022, the Company issued 19,905,736 shares of common stock in connection with the acquisition of the Acquired Assets.

 

Stock Options Plans

 

From time to time, the Company may grant stock options under its incentive plan covering shares of common stock to employees of the Company. Stock options, when exercised, are settled through the payment of the exercise price in exchange for new shares of stock underlying the option. These awards typically expire ten years from the grant date.

 

For the three and nine months ended September 30, 2023 and 2022, there was no compensation expense related to stock options. As of September 30, 2022, all stock options had vested. No stock options were granted or exercised during the three or nine months ended September 30, 2023 or 2022. Stock options for the purchase of 4,946 shares of common stock expired during the nine months ended September 30, 2022. The stock options had de minimis intrinsic values for the periods reported. Presented below is information for stock options outstanding and exercisable as of September 30, 2023, and December 31, 2022:

 

  

September 30, 2023

  

December 31, 2022

 
      Weighted      Weighted 
      Average      Average 
  Number of  Exercise  Number of  Exercise 
  

Shares

  

Price

  

Shares

  

Price

 
                 

Stock options outstanding and exercisable

  23,176  $38.92   28,122  $54.03 

 

 

The following table summarizes information for stock options outstanding and for stock options exercisable at September 30, 2023:

 

Options Outstanding

  

Options Exercisable

 
   

Exercise

  

Weighted

  

Remaining

      

Weighted

 
   

Price

  

Average

  

Contractual

      

Average

 

Number of

  

Range

  

Exercise

  

Term

  

Number of

  

Exercise

 

Shares

  

Low

  

High

  

Price

  

(years)

  

Shares

  

Price

 
                          
16,500  $7.20  $11.60  $10.00   4.0   16,500  $10.00 
5,676   90.00   90.00   90.00   1.3   5,676   90.00 
1,000   226.20   226.20   226.20   1.0   1,000   226.20 
                          
23,176  $7.20  $226.20  $38.92   3.2   23,176  $38.92 

 

Restricted Stock

 

The Company grants restricted stock under its incentive plan covering shares of common stock to employees and directors of the Company. In January 2023, 796,434 restricted stock awards were granted to employees and directors from the 2021 Equity Incentive Plan and 2022 Equity Incentive Plan. In addition, in June 2023, per the terms of his employment agreement 100,000 restricted stock shares were issued to the Company’s new Chief Financial Officer, and in August 2023, 40,000 restricted stock shares were issued to the Company's new non-executive Controller. The restricted stock awards are time-based awards and are amortized ratably over the requisite two-year service period. Restricted stock vests ratably on each anniversary following the grant date provided the grantee is employed on the vesting date. Forfeitures of restricted stock awards are recognized as they occur. Restricted stock granted to employees, when vested, may be settled through the net issuance of shares, reduced by the number of shares required to pay withholding taxes. Non-vested shares of restricted stock are not included in common shares outstanding until vesting has occurred.

 

The following table presents the changes in non-vested, time-based restricted stock awards to all employees and directors for the nine months ended September 30, 2023:

 

      

Weighted-Avg.

 
      

Grant Date

 
      

Fair Value

 
  

Shares

  

Per Share

 
         

Non-vested restricted stock as of December 31, 2022

  687,000  $3.79 

Granted

  936,434   2.18 

Vested

  (544,198)  3.30 

Modifications (accelerated vesting)

  (164,000)  2.85 

Forfeited

  (60,000)  2.30 

Non-vested restricted stock as of September 30, 2023

  855,236  $2.63 

 

For the three and nine months ended September 30, 2023, the Company recognized $0.6 million and $2.0 million, respectively, of stock compensation expense related to restricted stock grants. For the three and nine months ended September 30, 2022, the Company recognized $0.5 million and $2.6 million, respectively, of stock compensation expense related to restricted stock grants. Total compensation cost related to non-vested time-based awards not yet recognized in the Company’s condensed consolidated statements of operations as of September 30, 2023 was $0.9 million. This cost is expected to be recognized over a weighted average period of 1.6 years.

 

Dividends

 

On February 23, 2023 and May 30, 2023, the Company paid a quarterly cash dividends of $0.0225 per share of common stock outstanding to stockholders of record at the close of business on February 10, 2023 and May 19, 2023, respectively.

 

For the nine months ended September 30, 2023 and 2022, the Company paid dividends of $1.2 million and $1.2 million, respectively. As an update to the existing shareholder returns program, on August 9, 2023, the Board of Directors suspended the Company’s dividend payment program, with the associated future capital resources expected to be allocated towards the Company’s share repurchase program and repayments of our credit facility’s outstanding balance.

 

Share Repurchase Program

 

On April 26, 2023, the Board of Directors of the Company authorized and approved a share repurchase program for up to $5.0 million of the currently outstanding shares of the Company’s common stock. Subject to any future extensions, the repurchase program is scheduled to expire on the earlier of  June 30, 2024, or when a maximum of $5.0 million of the Company’s common stock has been repurchased, or when the program is discontinued by the Company.

 

Under the stock repurchase program, shares are repurchased from time to time in the open market or through negotiated transactions at prevailing market prices, or by other means in accordance with federal securities laws. Repurchases are made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. The repurchase program is funded using the Company’s working capital. The repurchased shares are cancelled and therefore will not be held in treasury or reissued.

 

During the nine months ended September 30, 2023, the Company paid $0.2 million for the repurchase of 163,300 shares at a weighted average price of $1.48 per share.  There were no share repurchases during the three months ended September 30, 2023.