NOTE 11. STOCK-BASED COMPENSATION

Equity Compensation Plans

In October 2007, the Company adopted the 2007 Omnibus Incentive Plan (the “2007 Plan”) to provide for the grant of equity awards, such as stock options, unrestricted and restricted common stock, stock units, dividend equivalent rights, and stock appreciation rights to employees, directors and outside consultants, as determined by the Board. The 2007 Plan expired on March 15, 2017. Upon expiration, new awards cannot be issued pursuant to the 2007 Plan, but outstanding awards continue to be governed by its terms. Stock options granted under the 2007 Plan expire no later than ten years from the date of grant. All stock options outstanding under the 2007 Plan were fully vested as of December 31, 2025.

In March 2017, the Company adopted the 2017 Omnibus Incentive Plan (the “2017 Plan”), which was approved by stockholders on June 2, 2017, to provide for the grant of equity awards, such as nonqualified stock options (“NQSOs”), incentive stock options (“ISOs”), restricted stock, performance shares, stock appreciation rights (“SARs”), RSUs and other share-based awards to employees, directors, and consultants, as determined by the Board. The 2017 Plan does not affect awards previously granted under the 2007 Plan. Upon adoption, the 2017 Plan allowed for awards of up to 16,249 shares of the Company’s common stock, plus an automatic annual increase in the number of shares authorized for awards on the first day of each of the Company’s fiscal years beginning January 1, 2018 through January 1, 2027 equal to (i) 4% of the number of shares of common stock outstanding on the last day of the immediately preceding fiscal year or (ii) such lesser number of shares of common stock as determined by the Board. On November 25, 2025, the number of shares available for future awards under the 2017 Plan was increased by 239,086 shares, which included 200,000 shares the Company’s stockholders approved for issuance under the Plan pursuant to a stockholder vote at the Company’s 2025 stockholder meeting on October 16, 2025. As of December 31, 2025, there were 223,952 shares available for future awards under the 2017 Plan.

Under the terms of the 2017 Plan, the exercise price of NQSOs, ISOs and SARs may not be less than 100% of the fair market value of the Company’s common stock on the date of grant and, if ISOs are granted to an owner of more than 10% of the Company’s common stock, then not less than 110% of the fair market value of the Company’s common stock on the date of grant. The term of option awards will not be longer than ten years or, in the case of ISOs, no longer than five years with respect to holders of more than 10% of the Company’s common stock. Stock options granted to employees generally vest over four years, while options granted to directors and consultants typically vest over a shorter period, subject to continued service. RSUs granted to directors typically vest over 1 year. The Company issues new shares of Company common stock to satisfy exercises of options under or settlement of RSUs from the 2007 Plan and the 2017 Plan.

Summary of Outstanding Equity Awards

The following table summarizes information about the Company’s stock options and RSUs outstanding at December 31, 2025, and activity during the year ended December 31, 2025 (in thousands except per share and years):

* After giving retroactive effect to a 1-for-5 reverse stock split that became effective February 20, 2026.

Aggregate intrinsic value is calculated as the difference between the closing market price of the Company’s common stock as quoted on the NYSE American and the exercise price of the underlying stock options as of the applicable measurement date for option awards that have an exercise price that is lower than the market price. There were no stock option awards exercised during the years ended December 31, 2025 or 2024.

As of December 31, 2025, the total unrecognized compensation cost related to unvested stock options and RSUs was approximately $81 thousand. This amount is expected to be recognized as stock-based compensation expense in the Company’s Consolidated Statements of Operations over the remaining weighted average vesting period of 0.8 years.

Equity Awards to Employees and Directors

The Company grants options to purchase common stock to its employees and directors at prices equal to or greater than the market value of the stock on the dates the options are granted. The Company has estimated the value of stock option awards as of the date of grant by applying the Black-Scholes option pricing model using the single-option valuation approach. The application of this valuation model involves assumptions that are judgmental and subjective in nature. See Note 2, “Summary of Significant Accounting Policies,” for a description of the accounting policies that the Company applied to value its stock-based awards.

During each of the years ended December 31, 2025 and 2024, the Company did not grant any stock options to employees and directors to purchase shares of the Company’s common stock.

Forfeitures are estimated at the time of grant and reduce compensation expense ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

During each of the years ended December 31, 2025 and 2024, the Company granted 18,000 and 1,030 RSUs, respectively, to directors.

For the years ended December 31, 2025 and 2024, the Company recognized stock-based compensation expense of $29 thousand and $84 thousand, respectively, for equity awards to employees and directors.

Stock-Based Awards to Non-Employees

The Company did not grant options or restricted stock to non-director non-employees during the years ended December 31, 2025 and 2024.

For the year ended December 31, 2024, the Company recognized stock-based compensation expense of $13 thousand, as it relates to non-director non-employees. The Company did not recognize stock-based compensation expense as it relates to non-employees for the year ended December 31, 2025.

Stock-Based Compensation Expense

Total stock-based compensation expense recognized for the years ended December 31, 2025 and 2024 was approximately $29 thousand and $148 thousand, respectively, and is included in general and administrative expense in the Company’s Consolidated Statements of Operations.

Of these amounts, approximately $29 thousand and $84 thousand for the years ended December 31, 2025 and 2024, respectively, relate to employees supporting continuing operations.

For the year ended December 31, 2024, the remaining stock-based compensation expense relates to employees and non-employees associated with the Company’s discontinued operations. No stock-based compensation expense was recognized for employees non-employees associated with discontinued operations during the year ended December 31, 2025.

The Company’s equity compensation plans are administered on a centralized, corporate basis and the related awards result in an increase to consolidated equity. Management determined that allocating stock-based compensation expense to discontinued operations components would not provide meaningful information to investors. Accordingly, stock-based compensation is presented within continuing operations in the Consolidated Financial Statements.