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Note 8 - Stock-based Incentive Plans | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Compensation and Employee Benefit Plans [Text Block] |
8. | STOCK-BASED INCENTIVE PLANS
The Super League 2014 Stock Option and Incentive Plan (the “Plan”) was approved by the Board and the stockholders of Super League in October 2014. The Plan was subsequently amended as further described below. The Plan allows grants of stock options, stock awards and performance shares with respect to common stock of the Company to eligible individuals, which generally includes directors, officers, employees, advisors and consultants. The Plan provides for both the direct award and sale of shares of common stock and for the grant of options to purchase shares of common stock. Options granted under the Plan include non-statutory options as well as incentive options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended. The Board administers the Plan and determines which eligible individuals are to receive option grants or stock issuances under the Plan, the times when the grants or issuances are to be made, the number of shares of common stock subject to each grant or issuance, the status of any granted option as either an incentive stock option or a non-statutory stock option under the federal tax laws, the vesting schedule to be in effect for the option grant or stock issuance and the maximum term for which any granted option is to remain outstanding. The exercise price of options is generally equal to the fair market value of common stock of the Company on the date of grant. Options generally begin to be exercisable one month after grant and typically expire 10 years after grant. Stock options and restricted shares generally vest on a straight line basis over four years (generally representing the requisite service period). The Plan terminates automatically on July 1, 2027. The Plan provides for the following programs:
| ● | Option Grants Under the discretionary option grant program, the Company’s compensation committee of the Board may grant (1) non-statutory options to purchase shares of common stock to eligible individuals in the employ or service of Super League or its affiliates (including employees, non-employee members of the Board and consultants) at an exercise price not less than 85% of the fair market value of such shares on the grant date, and (2) incentive stock options to purchase shares of common stock to eligible employees at an exercise price not less than 100% of the fair market value of such shares on the grant date (not less than 110% of fair market value if such employee actually or constructively owns more than 10% of Super League’s voting stock or the voting stock of any of its subsidiaries).
| ● | Stock Awards or Sales Under the stock award or sales program, eligible individuals may be issued shares of common stock of the Company directly, upon the attainment of performance milestones or the completion of a specified period of service or as a bonus for past services. Under this program, the purchase price for the shares will not be less than 100% of the fair market value of the shares on the date of issuance, and payment may be in the form of cash or past services rendered. Eligible individuals will have no stockholder rights with respect to any unvested restricted shares or restricted stock units issued to them under the stock award or sales program; however, eligible individuals will have the right to receive any regular cash dividends paid on such shares.
The initial reserve under the Plan was 29,167 shares of common stock, which reserve was subsequently increased to 50,000 shares upon stockholders’ approval in May 2016. In July 2017, the Company amended and restated the Plan to increase the number of shares of common stock reserved thereunder from 50,000 shares to 75,000 shares. In October 2018, the Company amended and restated the Plan to increase the number of shares of common stock reserved thereunder from 75,000 shares to 91,667 shares. In July 2020, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 91,667 to 129,167. In May 2021, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 129,167 to 250,000. In June 2022, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 250,000 to 312,500. In September 2023, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 312,500 to 750,000. As of December 31, 2024, 120,000 shares remained available for issuance under the Plan. All 2014 Plan share reserve and other share amounts reflected herein have been retroactively adjusted to reflect the effect of the Reverse Split for all periods presented. Super League issues new shares of common stock upon the exercise of stock options, the grant of restricted stock, or the delivery of shares pursuant to vested restricted stock units. The compensation committee of the Board may amend or modify the Plan at any time, subject to any required approval by the stockholders of the Company, pursuant to the terms therein. In the event that any outstanding option or other right for any reason expires or is canceled or otherwise terminated, the shares allocable to the unexercised portion of such option or other right is returned and available for the purposes of this Plan. Stock Options The fair value of stock options granted was estimated on their respective grant dates using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions for the years ended December 31:
|  | 2024 |  |  | 2023 |
Expected Volatility |  |  | 98 | % |  |  | 95 | %
Risk–free interest rate |  |  | 4.08 | % |  |  | 4.18 | %
Dividend yield |  |  | - | % |  |  | - | %
Expected life of options (in years) |  |  | 6.02 |  |  |  | 5.35 |
The expected volatility assumption for purposes of determining the fair value of stock options for the periods presented was estimated based on reference to the historical stock price volatility of the Company and a representative peer group for the applicable estimated term. A summary of stock option activity for the year ended December 31, 2024 is as follows:
|  |  |  |  |  | Weighted-Average |  |  |  |  |
|  | Options (#) |  |  | Exercise Price Per Share ($) |  |  | Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value ($) |
Outstanding at December 31, 2023 |  |  | 396,000 |  |  | $ | 15.70 |  |  |  |  |  |  | $ | - |
Granted |  |  | 20,000 |  |  |  | 1.29 |  |  |  |  |  |  |  | - |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |  | - |
Canceled / forfeited |  |  | (50,000 | ) |  |  | 10.29 |  |  |  |  |  |  |  | 63,000 |
Outstanding at December 31, 2024 |  |  | 366,000 |  |  | $ | 15.66 |  |  |  | 8.05 |  |  | $ | - |
Vested and exercisable at December 31, 2024 |  |  | 220,000 |  |  | $ | 20.20 |  |  |  | 7.79 |  |  | $ | - |
The weighted-average grant date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $1.03 and $5.39, respectively. The aggregate fair value of stock options that vested during the years ended December 31, 2024 and 2023 was $418,000 and $1,079,000, respectively. As of December 31, 2024, the total unrecognized compensation expense related to non-vested stock option awards was $709,000, which is expected to be recognized over a weighted-average term of approximately 2.03 years. Restricted Stock Units The following table summarizes non-vested restricted stock unit activity for the year ended December 31, 2024:
|  | 2014 Plan Activity |  |  | Outside of the 2014 Plan Activity |  |  | Totals |
|  | Restricted Stock Units (#) |  |  | Weighted Average Grant Date Fair Value ($) |  |  | Restricted Stock Units (#) |  |  | Weighted Average Grant Date Fair Value ($) |  |  | Restricted Stock Units (#) |  |  | Weighted Average Grant Date Fair Value ($) |
At December 31, 2023 |  |  | 186,000 |  |  | $ | 10.87 |  |  |  | 90,000 |  |  | $ | 7.50 |  |  |  | 276,000 |  |  | $ | 9.76 |
Granted |  |  | 33,000 |  |  | $ | 0.81 |  |  |  | 625,000 |  |  |  | 0.84 |  |  |  | 658,000 |  |  |  | 0.85 |
Vested |  |  | (36,000 | ) |  | $ | 9.51 |  |  |  | (552,000 | ) |  |  | 1.13 |  |  |  | (588,000 | ) |  |  | 1.64 |
Canceled |  |  | (9,000 | ) |  | $ | 10.00 |  |  |  | (16,000 | ) |  |  | 18.56 |  |  |  | (25,000 | ) |  |  | 15.43 |
At December 31, 2024 |  |  | 174,000 |  |  | $ | 4.44 |  |  |  | 147,000 |  |  | $ | 3.92 |  |  |  | 321,000 |  |  | $ | 4.20 |
As of December 31, 2024, the total unrecognized compensation expense related to non-vested restricted stock units was $346,000 which will be recognized over a weighted-average term of approximately .7 years. During the year ended December 31, 2024 and 2023, the Company issued 640,000 and 39,000, respectively, restricted stock units (included in the table above) to nonemployees for services (“Nonemployee RSUs”). The weighted average grant date fair value of the Nonemployee RSUs granted during the year ended December 31, 2024 and 2023 was $0.84 and $1.67, respectively. Compensation expense for Nonemployee RSUs for the year ended December 31, 2024 and 2023 totaled $256,000 and $89,000, respectively. As of December 31, 2024, the total unrecognized compensation expense related to Nonemployee RSUs was $281,000. Warrants Issued to Employees and Nonemployees for Services A summary of employee and nonemployee warrant activity (outside of the Plan) for the year ended December 31, 2024 is as follows:
|  |  |  |  |  | Weighted-Average |  |  |  |  |
|  | Warrants (#) |  |  | Exercise Price Per Share ($) |  |  | Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value ($) |
Outstanding at December 31, 2023 |  |  | 31,000 |  |  | $ | 49.21 |  |  |  | - |  |  | $ | - |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Expired |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Outstanding at December 31, 2024 |  |  | 31,000 |  |  | $ | 49.21 |  |  |  | 2.70 |  |  | $ | - |
Vested and exercisable as of December 31, 2024 |  |  | 31,000 |  |  | $ | 49.21 |  |  |  | 3.70 |  |  | $ | - |
The aggregate fair value of Warrants that vested during the years ended December 31, 2024 and 2023 was $0 and $249,000, respectively. As of December 31, 2024, the total unrecognized compensation expense related to non-vested Warrants was $0. Noncash Stock Compensation Expense Noncash stock-based compensation expense was comprised of the following as of December 31:
|  | 2024 |  |  | 2023 |
Stock options |  | $ | 411,000 |  |  | $ | 1,014,000 |
Warrants |  |  | - |  |  |  | 228,000 |
Restricted stock units |  |  | 878,000 |  |  |  | 1,493,000 |
Total noncash stock compensation expense |  | $ | 1,289,000 |  |  | $ | 2,735,000 |
Noncash stock-based compensation expense was included in the following financial statement line items as of December 31:
|  | 2024 |  |  | 2023 |
Sales, marketing and advertising |  | $ | 488,000 |  |  | $ | 879,000 |
Engineering, technology and development |  |  | 30,000 |  |  |  | 219,000 |
General and administrative |  |  | 771,000 |  |  |  | 1,637,000 |
Total noncash stock compensation expense |  | $ | 1,289,000 |  |  | $ | 2,735,000 |
Modifications to Equity-Based Awards On January 1, 2022, the Company issued 67,500 performance stock units (“Original PSUs”) under the Company’s 2014 Amended and Restated Stock Option and Incentive Plan, which vest in five equal increments of 13,500 PSUs, based on satisfaction of the following vesting conditions during the three-year period commencing on January 1, 2022: (i) the Company’s stock price equaling $95.00 per share based on 60-day volume weighted average price (“VWAP”); (ii) the Company’s stock price equaling $120.00 per share based on 60-day VWAP; (iii) the Company’s stock price equaling $140.00 per share based on 60-day VWAP; (iv) the Company’s stock price equaling $160.00 per share based on 60-day VWAP; and (v) the Company’s stock price equaling $180.00 per share based on 60-day VWAP. The Original PSUs were fully expensed as of June 30, 2023. Noncash stock compensation expense related to the Original PSUs totaled $0 and $299,000 for the years ended December 31, 2024 and 2023, respectively. On April 30, 2023, the Board approved the cancellation of the 67,500 Original PSUs previously granted to certain executives (four plan participants in total) under the 2014 Plan (as described above). In exchange for the cancelled Original PSUs, the executives were granted an aggregate of 67,500 PSUs, which vest, over a five-year term, upon the Company’s common stock achieving certain VWAP goals as follows: (i) 20% upon achieving a 60-day VWAP of $16.00 per share, (ii) 20% upon achieving a 60-day VWAP of $20.00 per share; (iii) 20% upon achieving a 60-day VWAP of $24.00 per share; (iv) 20% upon achieving a 60-day VWAP of $28.00 per share; and (v) 20% upon achieving a 60-day VWAP of $32.00 per share, in each case, as quoted on the Nasdaq Capital Market (“Modified PSUs”). Total incremental compensation cost related to the Modified PSUs totaled $540,000 which is recognized prospectively over the implied service period, ranging from .69 years to 1.5 years, calculated in connection with the Monte Carlo simulation model used to determine the fair value of the equity awards immediately before and after the modifications. Net noncash stock compensation expense related to the Modified PSUs totaled $130,000 and $351,000 for the years ended December 31, 2024 and 2023, respectively. On April 30, 2023, the Board approved the cancellation of certain stock options to purchase an aggregate of 58,951 shares of the Company’s common stock previously granted to certain executives and employees (six plan participants in total) under the Company’s 2014 Amended and Restated Employee Stock Option and Incentive Plan (the “2014 Plan”), with an average exercise price of approximately $56.40. In addition, the Board approved the cancellation of certain warrants to purchase an aggregate of 26,100 shares of the Company’s common stock previously granted to certain executives and employees, with an average exercise price of approximately $199.80. In exchange for the cancelled options and warrants, certain executives and employees were granted options to purchase an aggregate of 305,000 shares of common stock under the 2014 Plan, at an exercise price of $9.80 (the closing price of the Company’s common stock as listed on the Nasdaq Capital Market on April 28, 2023, the last trading day before the approval of the awards), with one-third of the options vesting on the April 30, 2023, the grant date, with the remainder vesting monthly over the thirty-six month period thereafter, subject to continued service (“Executive Grant Modifications”) (collectively, “Modified Executive Grants”). The grant and exercise of the Modified Executive Grants was contingent upon the Company receiving approval from its stockholders to increase the number of shares available under the 2014 Plan, which was obtained in connection with the Company’s 2023 annual shareholder meeting in September 2023. As such, the grant date and the commencement of noncash stock compensation amortization for the Modified Executive Grants was September 7, 2023. Total incremental compensation cost related to the Modified Executive Grants totaled $347,000, $112,000 of which related to vested awards as of the modification date and was recognized as expense immediately, and $235,000 related to unvested awards which is recognized prospectively over the remaining service period of 3 years. Net noncash stock compensation expense related to the Modified Executive Grants totaled $221,000 and $573,000 for the years ended December 31, 2024 and 2023, respectively. On May 1, 2023, the Board approved the cancellation of options to purchase an aggregate of 29,224 shares of the Company’s common stock previously granted to its employees (68 plan participants in total) under the 2014 Plan, in exchange for newly issued options to purchase an aggregate of 63,900 shares of the Company’s common stock under the 2014 Plan, at an exercise price equal to the closing trading price on May 1, 2023, or $9.81, with a range of zero to one-third of the options vesting on the May 1, 2023, the grant date, dependent upon the tenure of the employee, and the remainder vesting monthly over the forty-eight month period thereafter, subject to continued service (“Employee Grant Modifications”)(collectively, “Modified Employee Grants”). Unrecognized compensation expense related to the original award as of the date of the Employee Grant Modifications totaled $960,000 which is recognized prospectively over the remaining service period of 4 years. Total incremental compensation cost related to the Modified Employee Grants totaled $449,000, $101,000 of which related to vested awards as of the modification date and was recognized as expense immediately, and $348,000 related to unvested awards which is recognized prospectively over the remaining service period of 4 years. Net noncash stock compensation expense related to the Modified Employee Grants totaled $158,000 and $300,000 for the years ended December 31, 2024 and 2023, respectively. Other On March 19, 2024, the Board approved that an equity pool consisting of (i) 1,692,606 shares of common stock, collectively, which amount is equivalent to ten percent of the then existing and outstanding common stock of the Company on an as-converted basis, be issued to executives of the Company in the following form, amounts and vesting conditions: (a) stock options to purchase 846,303 shares of common stock, with vesting at the rate of 1/36th per month in arrears, and exercisable at a price per share of $1.85 (collectively, the “2024 Options”); and (b) restricted stock units consisting of 846,303 shares of common stock with vesting of (i) fifty percent in equal one-third increments on the first, second and third anniversaries of the restricted stock unit grant issuances, and (ii) fifty percent to be allocated equally between (a) achievement of a profitable fiscal quarter, on a net income basis, in accordance with U.S. GAAP, (b) achievement of 85% of earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for fiscal year 2024, and (c) achievement of 85% of EBITDA target for fiscal year 2025 (with such fiscal year 2025 target to be approved by the Board as part of the fiscal year 2025 financial plan)(collectively, the “2024 RSUs”). The issuance of the 2024 Options and 2024 RSUs, as described above, is contingent upon the Company receiving approval from its stockholders to increase the number of shares available under the 2014 Plan at the Company’s next annual meeting of stockholders, and will be subject to cancellation in the event stockholder approval is not obtained.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 710 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/710/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 712 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/712/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/715/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent + Details
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