Stock-Based Compensation

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Note 11 – Stock-Based Compensation

A summary of the Company’s Share Incentive Plans are as follows:

2007 Share Incentive Plan

On December 12, 2007, shareholders approved the Company’s 2007 Share Incentive Plan (“2017 Incentive Plan”), in connection therewith, 750,000 shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2017 Incentive Plan through December 12, 2017. The Plan expired in December 2017. As of December 31, 2024, there were 120,000 options outstanding under this plan.

2016 Share Incentive Plan

On December 9, 2016, shareholders approved the Company’s 2016 Share Incentive Plan (“2016 Incentive Plan”), in connection therewith, 750,000 shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2016 Incentive Plan through December 9, 2026. As of December 31, 2024, there were 424,125 options outstanding under this plan.

2022 Share Incentive Plan

On July 14, 2022, shareholders approved the Company’s 2022 Share Incentive Plan (“2022 Incentive Plan”), in connection therewith, 515,000 shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2022 Incentive Plan through July 14, 2032. As of December 31, 2024, there were 279,000 options outstanding under this plan.

Under the 2016 and 2022 Share Incentive Plans, the purchase price of the common stock under each option plan shall be determined by the Committee, provided, however, that such purchase price shall not be less than the fair market value of the shares on the date such option is granted. The stock options generally expire seven to ten years after the date of grant.

As of December 31, 2024, there were 44,948 shares available for grant under the 2016 Equity Incentive Plan and 138,180 shares available for grant under the 2022 Equity Incentive Plan.

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

Note 11 – Stock-Based Compensation (continued)

The Company recorded stock-based compensation of $1.1 million and $0.9 million for the years ended December 31, 2024 and 2023, respectively, that were included in the following line items in our Consolidated Statements of Operations (in thousands):

	2024		2023
Cost of revenue	$	152	$	120
Research and development		188		159
Selling		107		94
General and administrative		616		535
Total stock-based compensation expense	$	1,063	$	908

Stock-based compensation expense in both years included approximately $0.2 million related to restricted stock awards pursuant to a Director Compensation plan discussed below. The Company recognizes forfeitures of stock awards as they occur.

For the year ended December 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 fair value of stock options granted during the year ended December 31, 2024 is based upon weighted average assumptions as provided 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 expected life is the number of years the Company estimates that the awards will be outstanding based on the simplified method that considers the vesting period and contractual period of the option. The expected volatility is measured using historical daily price changes of the Company’s common stock over the respective expected term. The Company has 823,125 of outstanding stock options under the three plans at December 31, 2024.

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

Note 11 – Stock-Based Compensation (continued)

The following table summarizes stock options awards for the years ended December 31, 2024 and 2023:

				Weighted
	Awards (in Shares)			Average Exercise Price
Outstanding at December 31, 2022		673,000		$	11.26
Granted		254,000			14.02
Expired / cancelled		(44,500	)		6.57
Exercised		(35,625	)		4.53
Outstanding at December 31, 2023		846,875			8.20
Granted		5,000			4.75
Expired / cancelled		(28,750	)		7.94
Exercised		-			-
Outstanding at December 31, 2024		823,125			8.24

At December 31, 2024 and 2023, stock options to purchase 485,000 and 265,000, respectively, shares of common stock were exercisable.

The following table summarizes information about the outstanding and exercisable options at December 31, 2024:

		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		444,625		6.7	$	4.39	$	-		285,375	$	5.86	$	50,580
$	7.01-10.00		20,000		3.3	$	8.07	$	-		20,000	$	8.07	$	-
$	10.01-13.00		130,000		2.7	$	10.62	$	-		122,500	$	10.55	$	-
$	13.01-16.00		228,500		8.2	$	14.11	$	-		57,125	$	14.11	$	-

As of December 31, 2024, there was $1.6 million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of 2.1 years.

Restricted Stock Awards

Pursuant to the Director Compensation plan approved on October 11, 2021, each of the five independent directors is entitled to compensation for an annual equity retainer in the amount of $40,000 per director, to be automatically granted on the date of the Company’s annual meeting of shareholders.

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

Note 11 – Stock-Based Compensation (continued)

The following table summarizes restricted stock awards for the years ended December 31, 2024 and 2023:

				Weighted
				Average Grant
	Shares of			Date Fair
	Restricted Stock			Value
Unvested outstanding at January 1, 2023		-		$	-
Granted		41,320			6.65
Vested		(24,187	)		6.81
Forfeited or cancelled		-			-
Unvested outstanding at December 31, 2023		17,133			6.53
Granted		57,327			3.55
Vested		(46,210	)		4.63
Forfeited or cancelled		-			-
Unvested outstanding at December 31, 2024		28,250		$	3.54

The fair value of the restricted stock awards is recorded as stock-based compensation expense over the one-year vesting period and totaled $0.2 million for the both years ending December 31, 2024 and 2023, respectively.