Note 5 - Stock-based Compensation

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

5. STOCK-BASED COMPENSATION

At June 30, 2024, we had two stock-based compensation plans in effect. We record compensation cost related to unvested stock awards by recognizing the unamortized grant date fair value on a straight-line basis over the vesting periods of each award. We have estimated forfeiture rates based on our historical experience. Stock option compensation expense for the three and six month periods ended June 30, 2024 and 2023 has been recognized as a component of general and administrative expenses and development expenses in the accompanying Consolidated Financial Statements. We recorded $425,000 and $150,000 of stock-based compensation expense for the three months ended June 30, 2024 and 2023, respectively, and $585,000 and $150,000 for the six months ended June 30, 2024 and 2023, respectively. During the quarter ended June 30, 2024, an aggregate of 10,800 shares totaling $150,000 were granted to the three independent members of our board of directors pursuant to the 2020 Non-Employee Directors’ Stock Incentive Plan (the “2020 Plan”), approved by the shareholders in August 2020. Pursuant to the terms of the 2020 Plan, the shares were granted at fair market value on the date of the 2024 Annual Meeting of Shareholders and vested upon issuance. During the quarter ended June 30, 2023, an aggregate of 6,021 shares totaling $150,000 were granted to the three independent members of our board of directors pursuant to the 2020 Plan at fair market value on the date of the 2023 Annual Meeting of Shareholders and vested upon issuance.

Stock Options

As of June 30, 2024, there was no unrecognized compensation cost related to stock options. There were no options exercised during the three and six months ended June 30, 2024. No options expired unexercised during the quarter. The following table summarizes options as of June 30, 2024:

Options Outstanding and Exercisable:
Range of Exercise Price			Number Outstanding		Wgt. Avg. Contractual Life Remaining (in years)		Wgt. Avg. Exercise Price		Aggregate Intrinsic Value
$3.50	-	$3.86		13,000		2.7	$	3.75	$	140,930
	$7.80			8,000		3.9	$	7.80	$	54,320
	$19.99			30,000		4.6	$	19.99	$	-
	$39.11			8,000		4.9	$	39.11	$	-
$3.50	-	$39.11		59,000		4.1	$	17.35	$	195,250

The estimated fair value of options granted is calculated using the Black-Scholes option pricing model with assumptions as previously disclosed in our 2023 Form 10-K.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the second quarter of 2024 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2024. The amount of aggregate intrinsic value will change based on the market value of the Company’s stock.

Restricted Stock Units

Restricted Stock Units, or RSUs, generally vest at the end of a three-year vesting period. A summary of the Company’s RSU activity was as follows:

	Number of Restricted Stock Units			Weighted-average grant date fair value per share
Balance as of December 31, 2023		-		$	-
Granted		287,484			12.34
Vested		-			-
Canceled and forfeited		(1,300	)		12.34
Balance as of June 30, 2024		286,184		$	12.34

As of June 30, 2024, unrecognized compensation costs related to unvested RSUs was $2.9 million, which we expect to recognize over a weighted-average period of 2.6 years.