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Note 12 - Stock-based Compensation

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 12: STOCK-BASED COMPENSATION

A summary of outstanding options is included below:

Time Vesting Options						Weighted
						Average				Weighted								Weighted
						Remaining				Average								Average
Range of Exercise		Number				Contractual				Exercise				Options				Exercise
Prices between		Outstanding				Life				Price				Exercisable				Price
< $4.00			953,000				9.58			$	2.39				-
$4.00 - $8.00			480,005				4.92				7.39				480,005				7.39
$8.01+			44,674				1.19				19.84				44,674				19.84
			1,477,679				7.81			$	4.54				524,679

Performance Vesting Options

Weighted

Average

Weighted

Weighted

Remaining

Average

Average

Number

Contractual

Exercise

Options

Exercise

Outstanding

Life

Price

Exercisable

Price

240,000

4.67

$

7.59

240,000

$

7.59

Market Vesting Options

Weighted

Average

Weighted

Weighted

Remaining

Average

Average

Number

Contractual

Exercise

Options

Exercise

Outstanding

Life

Price

Exercisable

Price

733,334

6.71

$

3.00

733,334

$

3.00

																		*Performance Vesting*
		*Market Vesting Options*								*Time Vesting Options*								*Options*
						*Weighted*								*Weighted*								*Weighted*
						*Average*								*Average*								*Average*
		*Options*				*Exercise*				*Options*				*Exercise*				*Options*				*Exercise*
Date/Activity		*Outstanding*				*Price*				*Outstanding*				*Price*				*Outstanding*				*Price*
Balance, December 31, 2024			733,334			$	3.00				591,897			$	9.57				240,000			$	7.59
Granted			-				-				960,500				2.39				-				-
Forfeited or expired			-				-				(74,718	)			16.71				-				-
Balance, September 30, 2025			733,334			$	3.00				1,477,679			$	4.54				240,000			$	7.59

The weighted average remaining contractual life for options exercisable is 5.65 years as of September 30, 2025.

Employee Awards

On April 1, 2025, the Company granted stock options to purchase an aggregate of 567,500 shares of common stock to employees pursuant to the Company’s 2023 Stock Incentive Plan (the “Plan”), which was previously approved by shareholders. The options have an exercise price of $1.95 per share, equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal annual installments over a three-year period, subject to continued service through each vesting date, and expire ten years from the date of grant. The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 96%, expected term of 6.5 years, risk-free interest rate of 4.00%, dividend yield of 0%, and the Company’s stock price of $1.95 as of the valuation date. The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 Compensation - Stock Compensation, based on the grant-date fair value of the options.

On June 2, 2025, the Company granted stock options to purchase an aggregate of 378,000 shares of common stock to employees under the Plan. The options have an exercise price of $3.05 per share, equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal annual installments over a three-year period, subject to continued service through each vesting date, and expire ten years from the date of grant. The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94%, expected term of 6.5 years, risk-free interest rate of 4.17%, dividend yield of 0%, and the Company’s stock price of $3.05 as of the valuation date. The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 Compensation - Stock Compensation, based on the grant-date fair value of the options.

On June 2, 2025, the Company accelerated the vesting of options to purchase 733,334 shares of common stock. Prior to such acceleration, the vesting of these options depended on the Company’s share price meeting various price targets. One such share price target was an amount equal to the “Guaranteed Price,” as such term is defined in the Merger Agreement by and among the Company, Reflect, CRI Acquisition Corporation, a Delaware corporation, and RSI Exit Corporation, a Texas corporation and representative of the former stockholders of Reflect (“RSI”). On March 14, 2025, the Company and RSI settled and resolved a dispute related to the Guaranteed Consideration. On June 2, 2025, in consideration of the efforts in resolving and settling such dispute, the Compensation Committee of the Company fully vested the 733,334 options. As a result of the amendment and corresponding vesting, the Company recognized stock compensation expense of $1,149 during the three months ended June 30, 2025.

On July 3, 2025, the Company granted 575,000 restricted stock units under the Plan. The restricted stock units vest in three equal installments over a period of three years, subject to continued service through the applicable vesting dates. The grant date fair value of the restricted stock units was estimated at $3.30 per share based on the closing price of the Company’s common stock on the grant date. The Company expects to recognize stock-based compensation expense of approximately $1,898 over the requisite service periods.

On September 15, 2025, the Company granted stock options to purchase an aggregate of 15,000 shares of common stock to employees under the Plan. The options have an exercise price of $2.31 per share, equal to the closing market price of the Company’s common stock on the grant date. The options vest in equal annual installments over a three-year period, subject to continued service through each vesting date, and expire ten years from the date of grant. The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94%, expected term of 6.5 years, risk-free interest rate of 3.75%, dividend yield of 0%, and the Company’s stock price of $2.31 as of the valuation date. The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 Compensation - Stock Compensation, based on the grant-date fair value of the options.

Stock-based compensation expense recognized for the three and nine months ended September 30, 2025 and 2024 was $308 and $1,559, and $3 and $9, respectively, and is included within general and administrative expense in the Condensed Consolidated Statements of Operations. At September 30, 2025, unrecognized compensation cost related to unvested share-based awards totaled $3,278, which is expected to be recognized over a weighted-average period of approximately 2.67 years.