INCENTIVE PLANS

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

INCENTIVE PLANS

NOTE 8. INCENTIVE PLANS

In May 2017, the shareholders approved the 2017 Stock Incentive Plan which authorized the issuance of 350,000 shares. An additional 50,000, 175,000, 100,000 and 100,000 shares were authorized by the shareholders in March 2020, May 2022, May 2023 and May 2024, respectively.

Stock Options

We estimate the fair value of share-based awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense in the consolidated statements of operations and comprehensive (loss) income over the requisite service periods. Because share-based compensation expense is based on awards that are ultimately expected to vest, share-based compensation expense will be reduced to account for estimated forfeitures. We estimate forfeitures at the time of grant and revise the estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

We used the Black-Scholes option-pricing model to calculate the fair value of option-based awards. Our determination of fair value of option-based awards on the date of grant using the Black-Scholes model is affected by our stock price as well as assumptions regarding several subjective variables. These variables include, but are not limited to, our expected stock price, volatility over the term of the awards, risk-free interest rate, and the expected life of the options. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of our stock options. The expected volatility and holding period are based on our historical experience. For all grants, the amount of compensation expense recognized has been adjusted for an estimated forfeiture rate, which is based on historical data. Weighted average stock option fair value assumptions and the weighted average grant date fair value of stock options granted were as follows:

	2024			2023
Stock option fair value assumptions:
Risk-free interest rate		3.83 - 4.40	%		3.45-4.34	%
Expected life (years)		6.0			6.5
Dividend yield		0	%		0	%
Expected volatility		58	%		60	%
Weighted average grant date fair value of stock options granted	$	6.49		$	5.73

Total compensation expense related to stock options was $243 and $256 for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, there was $781 of unrecognized compensation which will vest and expense over the next 3.4 years.

Following is the status of option activity as of and for the years ended December 31, 2024 and 2023 as follows:

	Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding – January 1, 2023		452,700		$	5.97
Granted		94,000			9.36
Exercised		(39,044	)		4.09
Forfeited		(48,956	)		7.77
Outstanding – December 31, 2023		458,700		$	6.63		6.53	$	1,432
Granted		23,000			11.08
Exercised		(12,300	)		4.55
Forfeited		(16,000	)		10.23
Outstanding – December 31, 2024		453,400		$	6.79		5.70	$	1,654
Exercisable on December 31, 2024		291,100		$	5.01		4.38	$	1,559

Restricted Stock Units (“RSUs”)

Total compensation expense related to the RSUs were $218 and $167 for the years ended December 31, 2024 and 2023, respectively. Total unrecognized compensation expense related to the RSUs was $87, which will vest over the next 0.3 years.

Following is the status of restricted stock activity as of and for the years ended December 31, 2024 and 2023 as follows:

	Shares			Weighted- Average Remaining Vesting Term (in years)		Aggregate Intrinsic Value
Outstanding – January 1, 2023		21,000
Granted		22,500
Vested		(10,500	)
Forfeited		(6,000	)
Outstanding – December 31, 2023		27,000			1.0	$	254
Granted		15,141
Vested		(16,500	)
Forfeited		(1,500	)
Outstanding – December 31, 2024		24,141			0.3	$	248