Note 6 - Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

6. STOCK-BASED COMPENSATION

At September 30, 2022, we have four stock-based compensation plans in effect. In August 2020, shareholders approved the 2020 Non-Employee Directors’ Stock Incentive Plan (the “2020 Plan”), which authorizes the issuance of 200,000 shares of common stock to non-employee directors. In May 2022, shareholders approved the 2022 Employee Stock Incentive Plan (the “2022 Plan”), which authorizes the issuance of 750,000 shares of common stock to employees. We record compensation cost related to unvested stock awards by recognizing the unamortized grant date fair value on a straight-line basis over the vesting periods of each award. We have estimated forfeiture rates based on our historical experience. Stock option compensation expense for the three and nine month periods ended September 30, 2022 and 2021 has been recognized as a component of general and administrative expenses in the accompanying Consolidated Financial Statements. We recorded $0 and $32,000 of stock-based compensation expense for the three months ended September 30, 2022 and 2021, respectively, and $160,000 and $287,000 for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, there is no unrecognized compensation cost related to stock options. There were no options exercised during the three and nine months ended September 30, 2022. No options expired unexercised during the quarter. The following table summarizes options as of September 30, 2022:

Options Outstanding and Exercisable:
Range of Exercise Price			Number Outstanding		Wgt. Avg. Contractual Life Remaining (in years)		Wgt. Avg. Exercise Price		Aggregate Intrinsic Value
$3.50	-	$3.86		13,000		4.5	$	3.75	$	256,480
	$7.80			8,000		5.7	$	7.80	$	89,550
	$19.99			30,000		6.3	$	19.99	$	53,400
	$39.11			8,000		6.7	$	39.11	$	−
$3.50	-	$39.11		59,000		5.9	$	17.35	$	399,430

The estimated fair value of options granted is calculated using the Black-Scholes option pricing model with assumptions as previously disclosed in our 2021 Form 10-K.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the company’s closing stock price on the last trading day of the third quarter of 2022 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2022. The amount of aggregate intrinsic value will change based on the market value of the company’s stock.