COMMON STOCK AND STOCK OPTIONS

12 Months Ended

Dec. 31, 2023

COMMON STOCK AND STOCK OPTIONS [Abstract]

COMMON STOCK AND STOCK OPTIONS

NOTE 6 - COMMON STOCK AND STOCK OPTIONS

Common Stock

At December 31, 2023 and 2022, there were 714,050 and 627,600 shares, respectively, of the Company’s authorized common stock reserved for issuance upon exercise of outstanding options under its stock option plan.

Preferred Stock

The Company’s Articles of Incorporation provide that the Board of Directors has the authority, without further action by the holders of the outstanding common stock, to issue up to five million shares of preferred stock from time to time in one or more series. The Board of Directors shall fix the consideration to be paid, but not less than par value thereof, and to fix the terms of any such series, including dividend rights, dividend rates, conversion or exchange rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price and the liquidation preference of such series. As of December 31, 2023 and 2022, the Company does not have any preferred stock outstanding.

Stock Options

As of December 31, 2023, the Company has two stock option plans: the 2009 Long-Term Incentive Plan (“2009 Plan”) which ended in 2019, and the 2020 Long-Term Incentive Plan (“2020 Plan”).

Both the 2009 and the 2020 Plan authorize the grant of incentive stock options, non-qualified stock options, SARs, restricted stock, bonus stock, and performance shares to employees, consultants, and non-employee directors of the Company. The exercise price of each option shall not be less than the fair market value of the common stock at the date of grant. The total number of the Company’s shares that may be awarded under the 2009 Plan was 1,000,000 shares of common stock, and the 2020 Plan was 1,000,000 shares of common stock. At December 31, 2023, there were options outstanding for 295,000 shares of common stock under the 2009 Plan and 419,050 shares of common stock under the 2020 Plan. As of December 31, 2022, there were options outstanding for 311,000 shares of common stock under the 2009 Plan and 316,600 shares of common stock under the 2020 Plan.

Options expire on the date determined, but not more than ten years from the date of grant. All of the options granted under the 2009 and 2020 Plan may be exercised after four years in installments upon the attainment of specified length of service, unless otherwise determined by the Compensation Committee as set forth in the Award Agreement. In the event of a change in control (as defined), the options will vest in full at the time of such change in control.

Transactions with respect to the Company’s stock option plans for the years ended December 31, 2023 and 2022 are as follows:

	Number of Shares			Weighted Average Exercise Price
Outstanding at January 1, 2022		568,650		$	2.02
Granted		110,000			2.03
Expired		(40,300	)		2.32
Forfeited		(10,750	)		2.36
Outstanding at December 31, 2022		627,600		$	2.00
Granted		118,950			2.86
Expired		-			0.00
Forfeited		(32,500	)		2.14
Outstanding at December 31, 2023		714,050		$	2.14

As of December 31, 2023, there were 580,950 shares of common stock reserved for the granting of additional options.  The 2009 Plan expired at the end of 2019 and no additional options could be granted.

The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations for the years ended December 31:

	2023		2022
Data and product costs	$	38,110	$	27,765
Selling, general and administrative costs		64,988		52,668
	$	103,098	$	80,433

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model that uses the weighted average assumptions noted in the following table. Expected volatilities are based on historical volatility of our stock through the date of grant. The Company uses the simplified method to estimate the options’ expected term. The risk-free interest rate used is based on the U.S. Treasury constant maturities at the time of grant having a term that approximates the expected life of the option.

The fair value of options granted during the year ended December 31, 2022 was $139,782. The fair value of options granted during the year ended December 31, 2023 was $236,600. The fair value of options at date of grant was estimated using the Black-Scholes model with the following assumptions:

	2023			2022
Risk-free interest rate		3.80	%		1.91	%
Expected volatility factor		74.56	%		71.09	%
Expected dividends		0.00			0.00
Expected life of the option (years)		7.40			6.32

The Company issues new shares upon the exercise of options.

The following table summarizes information about the Company’s stock options outstanding at December 31, 2023:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$ 1.00 - $ 2.00		308,250		5.95	$	1.59		68,720	$	1.57
$ 2.01 - $ 3.00		350,800		4.38	$	2.45		138,940	$	2.50
$ 3.01 - $ 6.00		55,000		8.68	$	3.16		4,000	$	4.00
		714,050		5.39	$	2.14		211,660	$	2.23

The aggregate intrinsic value represents the total pre-tax intrinsic value, based on options with an exercise price less than the Company’s closing stock price of $2.33 and $2.40 as of December 31, 2023 and 2022, respectively, which would have been received by the option holders had those option holders exercised their options as of that date. The aggregate intrinsic value of options outstanding as of December 31, 2023 and 2022 was $249,396 and $297,725, respectively.

As of December 31, 2023, the total compensation cost related to unvested stock-based awards granted to employees under the Company’s stock option plan but not yet recognized was $516,193. This cost will be amortized over a weighted average term of 5.35 years and will be adjusted for subsequent changes in estimated forfeitures.

A summary of the status of the Company’s non-vested options and changes during the year ended December 31, 2023 is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested, beginning of year		524,955		$	1.05
Granted		118,950			1.99
Vested		(114,215	)		1.06
Terminated or expired		(27,300	)		1.14
Non-vested, end of year		502,390		$	1.27

Share Repurchase Program

In January of 2022, the Company’s Board of Directors authorized a share repurchase program for the repurchase of up to $1,000,000 of the Company’s outstanding common stock. The Company has not repurchased any shares under this program.