Note 11 - Share-based Incentive Plan

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

11. SHARE-BASED INCENTIVE PLAN

The Company maintains a restricted stock incentive plan for the purpose of attracting and retaining officers, employees, and non-employee board members. Share awards generally vest in equal annual installments over a three-to-ten-year period from date of issuance. Non-vested shares have voting rights and are eligible for any dividends paid to common shares. The Company recognized compensation cost for these fixed awards over the service vesting period, which represents the requisite service period, using the straight-line method. Prior to our IPO, the value of non-vested shares was calculated based on the offering price of the shares in the most recent private placement offering of $20.00, adjusted for stock dividends since granted and assumed selling costs, which management believed approximated fair market value as of the date of grant. Upon our IPO, the value of non-vested shares granted is generally calculated based on the closing price of our common stock on the date of the grant.

During our Annual Stockholders meeting, held on June 1, 2023, the Company's 2017 Incentive Award Plan was amended to (i) increase the number of shares available for issuance thereunder to 3,500,000 from 2,500,000 shares of common stock and (ii) add an evergreen provision to, on April 1st and October 1st of each year, automatically increase the maximum number of shares of common stock available under the plan to 15% of the Company’s outstanding shares of common stock, if on such date 3,500,000 (as adjusted for any reverse splits) is less than 15% of the Company’s then-outstanding shares of common stock.

A summary of the activity for the Company’s restricted stock was as follows:

Outstanding shares:	Common Shares
Balance at December 31, 2022		349,042
Granted		1,006,430
Forfeited		(11,401	)
Vested		(51,833	)
Balance at September 30, 2023		1,292,238

The non-vested restricted shares outstanding as of September 30, 2023, will vest over the next one to five years.

Share-based compensation expense was approximately $0.3 million and $0.3 million for the quarter ended  September 30, 2023 and  September 30, 2022, respectively. Share based compensation was $0.8 million and $0.9 million for the nine months ended September 30, 2023 and 2022, respectively. As of  September 30, 2023, future unrecognized stock compensation related to unvested shares totaled approximately $2.4 million.