STOCK-BASED COMPENSATION EXPENSE

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION EXPENSE

NOTE 8: STOCK-BASED COMPENSATION EXPENSE

The Company recorded stock-based compensation for the three and six months ended June 30, 2024 and 2023, respectively, that were included in the following line items in our condensed consolidated statements of operations (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	38	$	41	$	76	$	60
Research and development		47		45		94		65
Selling		27		31		54		42
General and administrative		155		145		310		230
Total	$	267	$	262	$	534	$	397

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

Stock-based compensation expense for three months ended June 30, 2024 and 2023 included $57,423 and 40,000, respectively, and for the six month periods June 30, 2024 and 2023 included $103,736 and $80,000, respectively, related to restricted stock awards that directors are entitled to receive pursuant to the Director Compensation Plan. Under this plan each of the Company’s independent directors is entitled to an Annual Equity Retainer in the amount of $40,000, to be granted on the date of the Company’s annual meeting of shareholders.

For the six months ended June 30, 2024, the Company granted 5,000 stock options, vesting 25% per year over four years, with a ten-year life. The Company determined the weighted average fair value of stock options granted was $3.30 and is based upon weighted average assumptions below.

Stock price	$	4.75
Exercise price	$	4.75
Dividend yield		0	%
Expected volatility		77	%
Risk-free interest rate		4.12	%
Expected life (in years)		6.00

The following table summarizes stock options awards through June 30, 2024:

				Weighted
	Stock Option			Average
	Awards			Exercise
	(in shares)			Price
Outstanding at January 1, 2024		846,875			8.20
Granted		5,000			4.75
Forfeited		(13,750	)		7.94
Outstanding at June 30, 2024		838,125		$	8.18

The following table summarizes information about the outstanding and exercisable options at June 30, 2024 by ranges of exercise prices:

	Options Outstanding								Options Exercisable
			Weighted		Weighted						Weighted
Exercise			Average		Average						Average
Price	Number		Remaining		Exercise		Intrinsic		Number		Exercise		Intrinsic
Range	Outstanding		Contractual		Price		Value		Exercisable		Price		Value
$4.00-7.00		459,625		7.4	$	4.55	$	-		217,250	$	4.45	$	-
$7.01-10.00		20,000		3.8	$	8.07	$	-		20,000	$	8.07	$	-
$10.01-13.00		130,000		3.2	$	10.62	$	-		122,500	$	10.55	$	-
$13.01-16.00		228,500		8.7	$	14.11	$	-		57,125	$	14.11	$	-

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

As of June 30, 2024, there was $2.0 million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of 1.8 years.