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Note 12 - Share Based Compensation | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | 12. Share Based Compensation As of December 31, 2024, the Company has outstanding stock options and unvested restricted stock units granted under its 2008 Stock Compensation Plan, 2018 Stock Compensation Plan, 2020 Stock Compensation Plan and 2021 Stock Compensation Plan, which generally permitted stock-based awards under terms determined by the Company’s board of directors. Stock options and RSUs generally provided for vesting over service periods of one to four years, with option exercise prices generally equal to fair market value on the date of grant. As of December 31, 2024, no further shares were available under these plans for future awards. The Company also granted stock options and restricted stock units as inducements under contracts with selected executives. Stock options 2008 Plan Summary The Company’s 2008 Stock Compensation Plan, as amended, provides for equity-based awards to employees, directors, and eligible consultants. Awards under the Plan may take the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units (RSUs), stock appreciation rights (SARs), or other stock-based awards, all of which are classified as equity. Awards are generally settled by issuing shares of the Company’s common stock. Stock options and SARs are granted with exercise prices at least equal to the fair market value of the common stock on the grant date and typically have a contractual term of up to ten years. In accordance with ASC 718, the Company measures stock-based compensation expense for awards under the Plan at the grant-date fair value and recognizes it over the awards’ requisite service or performance period (generally the vesting period). The fair value of stock option and SAR grants is estimated on the grant date using the Black-Scholes option pricing model, while the fair value of restricted stock and RSUs is based on the market price of the Company’s stock at grant. Awards generally vest over a multi-year period of continuous service (e.g. four-year graded vesting for stock options) or upon achievement of specified performance goals, as applicable. Unvested awards are generally forfeited upon termination of employment or service, unless the Company’s Compensation Committee exercises its discretion to accelerate vesting or provide for alternative vesting arrangements in certain cases. The 2008 Plan Stock option award activity for the years ended December 31, 2024 and 2023 is summarized below for the periods presented.
|  |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Weighted- |  |  | Average |  |  | Aggregate |
|  |  |  |  |  | Average |  |  | Remaining |  |  | Intrinsic |
|  |  |  |  |  | Exercise |  |  | Contractual |  |  | Value |
Option Awards |  | Shares |  |  | Price |  |  | Term (Years) |  |  | (thousands) |
Outstanding at January 1, 2023 |  |  | 513,100 |  |  | $ | 1.63 |  |  |  | 2.16 |  |  | $ | 68 |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised / cancelled |  |  | - |  |  |  | – |  |  |  | – |  |  |  | – |
Forfeited or expired |  |  | (291,100 | ) |  |  | 2.10 |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2023 |  |  | 222,000 |  |  |  | 1.01 |  |  |  | 3.27 |  |  |  | 12 |
Granted |  |  | – |  |  |  |  |  |  |  |  |  |  |  |  |
Exercised / cancelled |  |  | (79,000 | ) |  | $ | 0.97 |  |  |  |  |  |  |  | 98 |
Forfeited or expired |  |  | (56,000 | ) |  |  |  |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2024 |  |  | 87,000 |  |  | $ | 1.01 |  |  |  | 2.66 |  |  | $ | 73 |
Exercisable at December 31, 2024 |  |  | 87,000 |  |  | $ | 1.01 |  |  |  | 2.66 |  |  | $ | 73 |
The Company recognized no stock-based compensation expense relating to stock option awards during the years ended December 31, 2024 and 2023 for the 2008 plan. The total intrinsic value of shares exercised in 2024 was $98,000. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2024 and 2023, was $0. 2018 Plan Summary SPAR Group’s 2018 Stock Compensation Plan provides for stock-based awards including stock options, stock appreciation rights (“SARs”), restricted stock, and restricted stock units (“RSUs”). All awards under the plan are classified as equity instruments and are generally settled by issuing shares of the Company’s common stock. Stock options are granted with exercise prices at least equal to the fair market value of the stock on the grant date and have a contractual term of up to ten years. The fair value of stock option and SAR awards is measured on the grant date using the Black-Scholes option pricing model, and the fair value of restricted stock and RSU awards is determined based on the market price of the Company’s common stock on the grant date. Awards generally vest over the recipients’ requisite service period, often in equal annual installments over four years from the grant date. Stock-based compensation cost is measured at the grant-date fair value of awards and recognized as expense on a straight-line basis over the vesting period, net of estimated forfeitures. If an award is forfeited before it vests, any previously recognized compensation expense is reversed. The plan also provides for accelerated vesting of outstanding awards under certain conditions such as the participant’s death, disability, or a change in control, which would result in immediate recognition of any remaining unrecognized compensation cost. 2018 Plan Stock option award activity for the years ended December 31, 2024 and 2023 are summarized below.
|  |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Weighted- |  |  | Average |  |  | Aggregate |
|  |  |  |  |  | Average |  |  | Remaining |  |  | Intrinsic |
|  |  |  |  |  | Exercise |  |  | Contractual |  |  | Value |
Option Awards |  | Shares |  |  | Price |  |  | Term (Years) |  |  | (thousands) |
Outstanding at January 1, 2023 |  |  | 145,000 |  |  | $ | 0.94 |  |  |  | 5.79 |  |  | $ | 52 |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised/cancelled |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Forfeited or expired |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2023 |  |  | 145,000 |  |  | $ | 0.94 |  |  |  | 4.79 |  |  | $ | 26 |
Granted |  |  | – |  |  |  | – |  |  |  |  |  |  |  |  |
Exercised |  |  | (75,000 | ) |  | $ | 0.99 |  |  |  |  |  |  |  | 90 |
Forfeited or expired |  |  | (30,000 | ) |  |  | – |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2024 |  |  | 40,000 |  |  | $ | 0.93 |  |  |  | 3.80 |  |  | $ | 40 |
Exercisable at December 31, 2024 |  |  | 40,000 |  |  | $ | 0.93 |  |  |  | 3.80 |  |  | $ | 26 |
The Company recognized no stock-based compensation expense relating to stock option awards during the years ended December 31, 2024 and 2023 under the 2018 plan. The total intrinsic value of shares exercised in 2024 was $90,000. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2024 and 2023, was $0. 2020 Plan Summary Under the 2020 Stock Compensation Plan, SPAR Group grants equity-classified stock-based awards exclusively in the form of non-qualified stock options (NQSOs). The plan does not authorize incentive stock options, stock appreciation rights, restricted stock, or restricted stock units. Each option award is settled by issuing shares of the Company’s common stock upon exercise. In accordance with ASC 718, the Company measures stock-based compensation expense for stock options at the grant-date fair value of the award (estimated using the Black-Scholes option pricing model) and recognizes it over the requisite service period (generally the vesting period) on a straight-line basis. The total expense is adjusted for estimated forfeitures of awards to reflect only those options expected to vest. Stock options under the 2020 Plan generally vest in annual installments over approximately four years of continuous service. The options have a contractual term of five years from the grant date. If a participant’s service terminates before an option is fully vested, any unvested portion is forfeited (no acceleration occurs on termination). Vested options typically remain exercisable for up to three months following termination of service, including in cases of retirement, death, or disability. In the event of a participant’s death, any remaining unvested options become fully vested immediately and are exercisable for up to three months thereafter by the participant’s estate or legal representative. 2020 Plan Stock option award activity for the years ended December 31, 2024 and 2023 are summarized below.
|  |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Weighted- |  |  | Average |  |  | Aggregate |
|  |  |  |  |  | Average |  |  | Remaining |  |  | Intrinsic |
|  |  |  |  |  | Exercise |  |  | Contractual |  |  | Value |
Option Awards |  | Shares |  |  | Price |  |  | Term (Years) |  |  | (thousands) |
Outstanding at January 1, 2023 |  |  | 375,000 |  |  | $ | 1.55 |  |  |  | 3.10 |  |  | $ | - |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised/cancelled |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Forfeited or expired |  |  | (20,000 | ) |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2023 |  |  | 355,000 |  |  | $ | 1.55 |  |  |  | 2.10 |  |  | $ | - |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised |  |  | (22,500 | ) |  |  | 1.55 |  |  |  |  |  |  |  | 17 |
Forfeited or expired |  |  | (220,000 | ) |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2024 |  |  | 112,500 |  |  | $ | 1.55 |  |  |  | 1.10 |  |  | $ | 44 |
Exercisable at December 31, 2024 |  |  | 78,750 |  |  | $ | 1.55 |  |  |  | 1.10 |  |  | $ | 31 |
The Company recognized $19,500 and $47,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2024 and 2023, respectively. The total intrinsic value of shares exercised in 2024 was $17,000. As of December 31, 2024, total unrecognized stock-based compensation expense related to stock options was $2,200, which will be recognized by the end of 2025. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2024 and 2023, was $5,800 and $12,000. CEO Inducement Plan Summary The Company granted a nonqualified stock option as an inducement award to the CEO, outside of the Company’s stockholder-approved equity plan. This stock option is classified as an equity award and carries a ten-year term. The grant-date fair value of the option was measured using the Black-Scholes option pricing model. The resulting compensation cost is recognized over the award’s requisite service period (the vesting period) on a straight-line basis. Vesting and Forfeiture Provisions: The option vested 100% on February 22, 2022. Upon vesting, any exercised portions were settled in shares of the Company’s common stock. The CEO Inducement Plan stock option award activity for the years ended December 31, 2024 and 2023 are summarized below.
|  |  |  |  |  |  |  |  |  | Weighted- |  |  |  |  |
|  |  |  |  |  | Weighted- |  |  | Average |  |  | Aggregate |
|  |  |  |  |  | Average |  |  | Remaining |  |  | Intrinsic |
|  |  |  |  |  | Exercise |  |  | Contractual |  |  | Value |
Option Awards |  | Shares |  |  | Price |  |  | Term (Years) |  |  | (thousands) |
Outstanding at January 1, 2023 |  |  | 630,000 |  |  | $ | 1.90 |  |  |  | 8.15 |  |  | $ | - |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised/cancelled |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Forfeited or expired |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2023 |  |  | 630,000 |  |  | $ | 1.90 |  |  |  | 7.15 |  |  | $ | - |
Granted |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Exercised |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Forfeited or expired |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Outstanding at December 31, 2024 |  |  | 630,000 |  |  | $ | 1.90 |  |  |  | 6.15 |  |  | $ | 25 |
Exercisable at December 31, 2024 |  |  | 630,000 |  |  | $ | 1.90 |  |  |  | 6.15 |  |  | $ | 25 |
The Company recognized $0 stock-based compensation expense relating to stock option awards during the years ended December 31, 2024 and 2023. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2024 and 2023, was $0. As of December 31, 2024, there was no unrecognized share-based compensation expense related to stock options granted under the CEO Inducement Plan. Restricted Stock Units The following table summarizes the activity for Restricted Stock Unit (RSU) awards during the years ended December 31, 2024 and 2023.
|  |  |  |  |  | Weighted- |
|  |  |  |  |  | Average |
|  |  |  |  |  | Grant Date |
|  |  |  |  |  | Fair Value |
|  | Shares |  |  | per Share |
Unvested at January 1, 2023 |  |  | 38,675 |  |  | $ | 1.81 |
Granted |  |  | 304,513 |  |  |  | 1.16 |
Vested |  |  | (100,337 | ) |  |  | 1.20 |
Forfeited |  |  | (16,575 | ) |  |  | 1.81 |
Unvested at December 31, 2023 |  |  | 226,276 |  |  | $ | 1.19 |
Granted |  |  | 57,143 |  |  |  | 1.75 |
Vested |  |  | (226,276 | ) |  |  | 1.19 |
Forfeited |  |  | – |  |  |  | - |
Unvested at December 31, 2024 |  |  | 57,143 |  |  | $ | 1.75 |
During the years ended December 31, 2024 and 2023, the Company recognized approximately $117,500 and $235,000, respectively, of stock-based compensation expense related to RSUs. During the years ended December 31, 2024 and 2023, the total fair value of RSUs vested was $315,000 and $104,000, respectively. As of December 31, 2024, total unrecognized stock-based compensation expense related to unvested RSUs awards was $36,885, which is expected to be recognized over a weighted average period of approximately 0.3 years. Phantom Stock Awards The Corporation prepared a 2022 Stock Compensation Plan that would have included Awards for NQSOs and RSUs (as defined below), but that plan was never submitted to its shareholders for approval. However, the Board had previously approved, for certain key executives, incentive stock based awards for 2022 using RSUs or cash. Since there were no plan based RSUs available, those executives instead received phantom stock awards. On and effective as of March 24, 2022, the Corporation issued an award of 111,111 Phantom Stock Units to each of its executives: Kori G. Belzer; William Linnane; and Ron Lutz. Each Phantom Stock Unit represents the right of the grantee to receive cash payments based on the fair market value of SGRP's Common Stock at the time of vesting. Vesting will occur in three tranches of one-third each over the three (3) year period following the Grant Date, provided that (i) the Grantee is an employee of the Company at the time and (ii) the Corporation has achieved 90% of the agreed upon the applicable financial target for the year commencing with 2022 (which was EBITDA for 2022), but tranches will rollover to the following year and be payable upon achievement of 120% of the agreed upon the applicable financial target for such following year. The Phantom Stock Units do not possess the rights of common stockholders of the Corporation, including any voting or dividend rights, and cannot be exercised or traded for the SGRP's Common Stock. Due to the cash settlement feature, the Phantom Stock Units are classified as liabilities in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheet. Accrued expenses and other current liabilities on the Consolidated Balance Sheet included $0 and $0.6 million related to Phantom Stock Units as of December 31, 2024 and December 31, 2023, respectively. .

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