Note 8 - Stock-based Compensation

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 8: STOCK-BASED COMPENSATION EXPENSE

The Company recorded stock-based compensation for the three months ended March 31, 2023 and 2022, respectively, that were included in the following line items in our Consolidated Statements of Operations (in thousands):

	Three months ended March 31,
	2023		2022
Cost of revenue	$	19	$	16
Research and development		20		4
Selling		11		5
General and administrative		85		72
Total	$	135	$	97

Stock-based compensation expense in both periods included approximately $40,000 related to restricted stock awards that directors elected to receive pursuant to the Director Compensation plan. Under this plan each of the four independent directors is entitled to an Annual Equity Retainer in the amount of $40,000, to be granted on the date of the Company’s annual meeting of shareholders.

For the three months ended March 31, 2023, the Company granted 244,000 stock options, vesting 25% per year over four years, with a ten-year life. The Company determined the weighted average fair value of stock options granted was $9.33 and is based upon weighted average assumptions below.

Stock price	$	14.11
Exercise price	$	14.11
Dividend yield		0	%
Expected volatility		72	%
Risk-free interest rate		3.39	%
Expected life (in years)		6.00

The following table summarizes stock options awards for the three months ended March 31, 2023:

				Weighted
	Stock Option			Average
	Awards			Exercise
	(in shares)			Price
Outstanding at January 1, 2023		673,000		$	5.70
Granted		244,000			14.11
Exercised		(17,500	)		4.19
Outstanding at March 31, 2023		899,500		$	8.01

The following table summarizes information about the outstanding and exercisable options at March 31, 2023 by ranges of exercise prices:

Options Outstanding											Options Exercisable
					Weighted		Weighted						Weighted
					Average		Average						Average
Exercise			Number		Remaining		Exercise		Intrinsic		Number		Exercise		Intrinsic
Price Range			Outstanding		Contractual		Price		Value		Exercisable		Price		Value
$4.00	-	7.00		515,500		8.6	$	4.54	$	4,514,485		112,375	$	4.48	$	990,989
$7.01	-	10.00		20,000		5.1	$	8.07	$	104,600		20,000	$	8.07	$	104,600
$10.01	-	13.00		120,000		4.0	$	10.52	$	333,800		120,000	$	10.52	$	333,800
$13.01	-	16.00		244,000		10.0	$	14.11		-		-		-		-

As of March 31, 2023, there was $3.2 million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of 3.2 years.