Note 16 – Stock-based Compensation

The Company’s Amended and Restated 2013 Equity Compensation Plan (the “Plan”), which expired on May 7, 2024, provided for the granting of incentive stock options, nonqualified stock options, restricted stock units, performance units, and stock purchase rights. There were no significant modifications to the Plan during the years ended December 31, 2024 and 2023. The term of the Plan was for 10 years. The Company intends to adopt a new equity compensation plan at its next Annual Meeting, pending shareholder approval.

As of December 31, 2024, there were 965,678 awards, including both restricted stock grants and option grants, issued and exercised under the Plan and no remaining shares available for grant under the Plan.

The Company recognized stock-based compensation expense (options and restricted share grants) in the following expense categories of its consolidated statements of operations as follows:

 Schedule of Recognized Stock-Based Compensation

Stock Options

The following table summarizes the Company’ stock option activity and related information for the period from January 1, 2023 to December 31, 2024:

  Schedule of Stock Option Activity

The following table summarizes outstanding options at December 31, 2024, by their exercise price:

 Summary of Outstanding Options

As of December 31, 2024, the number of vested shares underlying outstanding options was 578,707 at a weighted average exercise price of $46.70. None of these outstanding options were in-the-money as of December 31, 2024, therefore they had no intrinsic value. As of December 31, 2024, there was $1,674 of total unrecognized share-based compensation. Such costs are expected to be recognized over a weighted average period of approximately 2.1 years.

All outstanding options expire ten years from date of grant. Options granted to employees prior to 2018 vest in equal monthly installments over three years. Beginning in 2018, options granted to employees vest over four years, with 25% of the shares vesting on the first annual anniversary of grant and the remaining shares vesting in 36 equal monthly installments over the following 3 years.

The resulting compensation expense for stock options is generally recognized on a straight-line basis over the requisite service period of the award. No awards were granted under the Plan during the year ended December 31, 2024. The following weighted-average assumptions were used to calculate share-based compensation for awards granted under the Plan during the year ended December 31, 2023:

 Schedule of Compensation Expense for Stock Options

The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin (SAB) 107 to estimate the expected term of share option grants.

The expected stock price volatility assumption is based on the Company’s historical stock price volatility.