SHAREBASED COMPENSATION

12 Months Ended

Dec. 31, 2023

SHAREBASED COMPENSATION

SHARE-BASED COMPENSATION

NOTE 10 – SHARE-BASED COMPENSATION

For share-based awards granted, we have recognized compensation expense based on the estimated grant date fair value method.  For these awards we have recognized compensation expense using a straight-line amortization method and reduced for estimated forfeitures.  The impact on our results of operations of recording share-based compensation for the year ended December 31, 2023 and 2022 was as follows:

	Year Ended December 31,
	2023		2022
(in thousands)
Cost of goods sold	$	95	$	76
Research and development		257		228
Selling, general and administrative		838		872
Total share-based compensation	$	1,190	$	1,176

An immaterial amount of share-based compensation was capitalized into inventory as overhead for the years ended December 31, 2023 and 2022, respectively. The following table summarizes stock option activity under our stock option plans for the twelve months ended December 31, 2023 and 2022:

	2023						2022
	Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years		Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life in Years
Outstanding at beginning of year		12,500	$	4.98				12,500	$	4.98
Granted		-		-				-		-
Exercised		-		-				-		-
Cancelled, Expired or
Forfeited		-		-				-		-
Outstanding at end of year		12,500	$	4.98		1.33		12,500	$	4.98		2.33
Vested or expected to vest at the end of the period		12,500	$	4.98		1.33		12,466	$	4.98		2.33
Exercisable at end of year		12,500	$	4.98		1.33		9,375	$	4.98		2.33

The aggregate intrinsic value of outstanding options is $0.  There were no stock option awards exercised in 2023.

Restricted stock award activity including performance-based stock award activity under our share-based compensation plan was as follows:

	2023					2022
	Awards			Weighted - Average Grant Date Fair Value		Awards			Weighted - Average Grant Date Fair Value
Outstanding at beginning of year		665,200		$	3.94		623,777		$	4.73
Granted		387,100			4.36		330,215			3.26
Vested		(284,925	)		3.93		(249,292	)		4.95
Cancelled		(38,750	)		3.96		(39,500	)		4.33
Outstanding at end of year		728,625		$	4.17		665,200		$	3.94

During the years ended December 31, 2023 and 2022, 83,753 and 57,206 shares, respectively, were withheld from issuance related to restricted stock units vesting and stock option exercises to cover employee taxes and stock options exercise price.

Non-employee directors Restricted Stock Units (“RSUs”) typically vest over the earlier of one year or the next annual meeting of shareholders and Non-Qualified stock options vest over three years and have a six-year exercise period.  Employee RSUs typically vest annually over three or four years and employee Non-Qualified stock options typically vest quarterly over four years and have a six-year exercise period. Performance Stock Units (“PSUs”) typically cliff vest at the end of the performance period and the performance metric is cumulative revenue growth over the three-year period ending December 31, 2025 with a cumulative revenue threshold, target, and maximum performance measure.  The table above includes performance shares granted in 2023 of 30,000 shares at the target performance level (the threshold level would be 50% and the maximum level would be 150% of the target level).

The remaining unamortized expected future compensation expense and remaining amortization period associated with unvested option grants and restricted stock awards are:

	December 31, 2023		December 31, 2022
Unamortized future compensation expense	$	2,317,524	$	2,029,457
Remaining weighted average amortization period in years		2.44		2.47

The weighted average number of shares outstanding used to compute earnings (loss) per share included the following:

	Year Ended December 31,
	2023		2022
Weighted average shares outstanding		8,940,612		8,740,701
Restricted and Performance Stock Units		132,360
Stock Options		216
Weighted average diluted shares		9,073,188		8,740,701