STOCK-BASED COMPENSATION EXPENSE

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION EXPENSE

NOTE 8: STOCK-BASED COMPENSATION EXPENSE

The Company recorded stock-based compensation for the three months ended March 31, 2024 and 2023, respectively, that were included in the following line items in our condensed consolidated statements of operations (in thousands):

	Three months ended March 31,
	2024		2023
Cost of revenue	$	38	$	19
Research and development		47		20
Selling		27		11
General and administrative		155		85
Total	$	267	$	135

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

Stock-based compensation expense included $50,000 and $40,000 for the three months ended March 31, 2024 and 2023, respectively, related to restricted stock awards that directors elected to receive pursuant to the Director Compensation plan. Under this plan, each of the five 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, 2024, the Company granted 5,000 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 $3.30 and is based upon weighted average assumptions below.

Stock price	$	4.75
Exercise price	$	4.75
Dividend yield		0	%
Expected volatility		77	%
Risk-free interest rate		4.12	%
Expected life (in years)		6.00

The following table summarizes stock options awards for the three months ended March 31, 2024:

				Weighted
	Stock Option			Average
	Awards			Exercise
	(in shares)			Price
Outstanding at January 1, 2024		846,875		$	8.20
Granted		5,000			4.75
Forfeited		(10,000	)		8.01
Outstanding at March 31, 2024		841,875			8.18

The following table summarizes information about the outstanding and exercisable options at March 31, 2024 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		462,125		7.6	$	4.55	$	144,275		194,750	$	4.48	$	68,931
$	7.01-10.00		20,000		4.1	$	8.07	$	-		20,000	$	8.07	$	-
$	10.01-13.00		130,000		3.4	$	10.62	$	-		122,500	$	10.55	$	-
$	13.01-16.00		229,750		9.0	$	14.11	$	-		58,375	$	14.11	$	-

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

As of March 31, 2024, there was $2.2 million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of 2.0 years.