Note 11 - Share-Based Compensation

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

11. Share-Based Compensation

Stock Options

The Company has an employee and non-employee director incentive compensation equity plan. Related to these programs, the Company recorded $286 and $200 of share-based employee compensation expense related to stock options during the years ended December 31, 2024 and 2023, respectively, which is included as a component of cost of products and SG&A expenses in the accompanying consolidated statements of operations. No amount of share-based employee compensation expense was capitalized as part of capital expenditures or inventory for the years presented.

The Company uses the Black-Scholes-Merton option valuation model to calculate the fair value of a stock option grant. The share-based employee compensation expense recorded in the years ended December 31, 2024 and 2023 was calculated using the assumptions noted in the following table. Expected volatilities are based on the historical volatility of the Company’s common stock over the period of time, commensurate with the expected life of the stock options. The dividend yield assumption is based on the Company’s expectations of dividend payouts at the grant date. The Company has estimated its future stock option exercises. The expected term of option grants is based upon the observed and expected time to the date of post vesting exercises and forfeitures of options by the Company’s employees. The risk-free interest rate is derived from the average U.S. Treasury rate for the period, which approximates the rate at the time of the stock option grant.

	FY 2024			FY 2023
Expected Volatility		56.8	%		55.8	%
Expected Dividends		0	%		0	%
Expected Term (in years)		6.5			6.5
Risk-Free Rate		4.08	%		3.67	%
Estimated Forfeitures		0.0	%		0.0	%

A summary of stock option activity under the Company’s equity compensation plans as of December 31, 2024, and changes during the year ended December 31, 2024, are presented below:

			Wgt. Avg.		Wgt. Avg.		Wgt Avg.
			Exercise		Remaining		Grant Date		Aggregate
			Price ($)		Contractual		Fair Value ($)		Intrinsic
	Stock Options		Per Share		Life (Years)		Per Share		Value ($)
As of January 1, 2024
Outstanding		202,600		14.76		7.60		5.94		37,773
Vested		105,313		16.01		6.80		5.78		9,661
Nonvested		97,287		13.41		8.47		6.12		28,112
Period activity
Issued		115,900		12.31		—		7.29		—
Exercised		6,200		13.57		—		6.01		—
Forfeited		27,200		16.25		—		6.98		—
Expired		—		—		—		—		—
As of December 31, 2024
Outstanding		285,100		13.65		7.72		6.39		5,884,764
Vested		109,840		15.23		6.25		5.46		2,093,685
Nonvested		175,260		12.66		8.63		6.97		3,791,078

Outstanding:

					Wgt. Avg.		Wgt. Avg.
					Exercise		Remaining
Range of Exercise Prices			Stock Options		Price ($)		Contractual
($) Per Share			Outstanding		Per Share		Life (Years)
11.51	-	15.53		247,300		12.82		8.21
16.20	-	25.50		37,800		19.06		4.50
				285,100		13.65		7.72

Exercisable:

					Wgt. Avg.
					Exercise
Range of Exercise Prices			Stock Options		Price ($)
($) Per Share			Exercisable		Per Share
11.51	-	15.53		76,240		13.39
16.20	-	25.50		33,600		19.41
				109,840		15.23

The weighted-average grant-date fair value per option granted during the years ended December 31, 2024 and 2023 was $6.39 and $5.94, respectively.  There were 6,200 and 4,000 stock options exercised during the years ended December 31, 2024 and 2023, respectively.

Restricted Stock Units

In connection with the restricted stock units (sometimes referred to as "RSUs") granted to non-employee directors, the Company accrues compensation expense based on the estimated number of shares expected to be issued, utilizing the most current information available to the Company at the date of the consolidated financial statements.  The Company estimates the fair value of the restricted stock unit awards based upon the market price of the underlying common stock on the date of grant.

A summary of non-vested restricted stock units under the Company’s non-employee director share-based incentive compensation plan is as follows:

				Weighted Average
				Grant Date
Year ended December 31, 2024	Number of Shares			Price per Share
Unvested as of January 1, 2024		19,587		$	13.22
Granted		58,760			12.20
Vested and issued		(33,801	)		11.74
Cancelled/forfeited		—			—
Unvested as of December 31, 2024		44,546		$	12.99

				Weighted Average
Year ended December 31, 2023	Number of Shares			Price per Share
Unvested at January 1, 2023		41,129		$	13.20
Granted		45,412		$	12.37
Vested and issued		(66,954	)	$	12.63
Cancelled/forfeited		—			—
Unvested at December 31, 2023		19,587		$	13.22

During the year ended December 31, 2024 and 2023, the Company also issued 8,960 RSUs under a consulting agreement for advisory services to the Board of Directors.  The principal of the consulting firm was elected as the Chairman of the Board of Directors in December 2023.

During 2024 and 2023, the Company’s Board of Directors approved the Executive Salary Swap Plan to prospectively swap a portion of certain executive’s salaries for a 12 month period (10% minimum, up to 50%) otherwise payable in cash for a grant of RSUs (with each RSU representing a contingent right to receive one share of the Company’s Common Stock) at a fixed rate of $10 per share, rounded down to the nearest whole RSU.  The Restricted Stock Units vested at the date of the grant. The Company issued 13,979 and 6,739 RSUs under this arrangement during  December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, there was approximately $1,419 and $682, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements, including stock options and restricted stock units. This compensation cost is expected to be recognized approximately over one to four years.