Share Based Compensation

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Share Based Compensation

Note 12 – Share Based Compensation

Omnibus Incentive Plan

The Company issues share-based awards under its Company’s 2016 Omnibus Incentive Plan, as amended, which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share based awards and cash awards to associates, directors, consultants, and advisors of the Company and its affiliates, and to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. Stock options granted under the 2016 Plan may be non-qualified stock options or incentive stock options, within the meaning of Section 422(b) of the Internal Revenue Code of 1986, except that stock options granted to outside directors and any consultants or advisers providing services to the Company or an affiliate shall in all cases be non-qualified stock options. The option price must be at least 100% of the fair market value on the date of grant and if issued to a 10% or greater shareholder must be 110% of the fair market value on the date of the grant.

The 2016 Plan is to be administered by the Board, which has discretion over the awards and grants thereunder. No awards may be issued after November 21, 2026.

The number of shares authorized to be issued under the Plan is automatically adjusted from time to time when the Company issues additional shares of common stock or securities that are convertible or exercisable into shares of common stock (other than pursuant to the Plan) such that shares authorized under the plan after such issuance shall be equal to at least 20% of the issued and outstanding shares of the Company on a fully diluted basis. As of December 31, 2024 there are approximately 7.2 million shares authorized to be issued under the Plan.

Stock Options

The fair value of each option grant is estimated at the grant date using the Black Scholes method. The following assumptions were used in estimating fair value:

	2024			2023
Expected term		5.5 – 6.5 years			5.5 – 6.5 years
Volatility		89 – 91	%		92 – 94	%
Risk free interest rate		3 – 4	%		3 – 4	%
Dividend yield		0.00	%		0.00	%

A summary of the option activity during the years ended December 31, 2024 and 2023 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Life		Intrinsic
	Options			Price		In Years		Value
Outstanding, January 1, 2023		3,794,452		$	8.91
Granted		1,026,424			3.88
Forfeited		(35,600	)		6.72
Outstanding, December 31, 2023		4,785,276			7.85		8.0	$	1,444
Granted		1,213,008			4.38
Exercised		(12,710	)		3.59
Forfeited		(63,875	)		5.38
Outstanding, December 31, 2024		5,921,699		$	7.17		7.5	$	306
Exercisable, December 31, 2024		4,036,569		$	8.51		6.7	$	-

The Company includes share-based compensation expense in selling, general and administrative expenses, and recognized $4.1 million and $5.2 million during the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, there was $4.9 million of unrecognized share-based compensation expense related to outstanding stock options and restricted stock units that will be recognized over the weighted average remaining vesting period of 1.7 years.

Restricted Stock Units

The Company also issues restricted shares and restricted stock units under the 2016 Plan. A summary of the restricted share and restricted stock units activity during the years ended December 31, 2023 and 2022 is presented below:

	Number of
	Restricted Shares
Outstanding, January 1, 2023		400,000
Granted		-
Shares vested		-
Outstanding, December 31, 2023		400,000
Granted		-
Shares Vested		-
Outstanding, December 31, 2024		400,000