15. Stock Options and Award Programs

The Company’s stock incentive plan is administered by the Compensation Committee and authorizes the grant or award of incentive stock options, non-qualified stock options (NQSO), restricted stock awards (RSA), stock appreciation rights, dividend equivalent rights, performance unit awards and phantom shares. The Company issues new shares of common stock upon the exercise of stock options. Any shares associated with options forfeited are added back to the number of shares that underlie stock options to be granted under the stock incentive plan. The Company has issued restricted stock awards and non-qualified stock option awards as described below.

Valuation of Stock Awards

Restricted Stock. The Company records the fair value of all restricted stock awards based on the grant date fair value and amortizes stock compensation on a straight-line basis over the vesting period. Restricted stock award shares are issued when granted and included in the total number of common shares issued and outstanding. During the years ended December 31, 2025 and 2024, the Company granted 71,291 RSAs and 399,496 RSAs, respectively.

Non-Qualified Stock Options. The Company estimates the fair value of nonqualified stock options using a Black-Scholes Option Pricing model (“Black-Scholes model”). The fair value of each stock option is estimated on the date of grant using the Black-Scholes model, which requires an assumption of dividend yield, risk free interest rates, volatility, forfeiture rates and expected option life. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatilities are based on the historical volatility of our common stock over the expected option term. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. There were 120,000 stock options granted during the year ended December 31, 2025. There were no stock option awards granted during the year ended December 31, 2024.

Option pricing model assumptions for NQSO granted were valued using the following assumptions for the years then ended as set forth below:

Non-Qualified Stock Options

A summary of NQSO activity as of December 31, 2025 and 2024, and changes during the years then ended are set forth below:

The weighted-average remaining contractual life and the aggregate intrinsic value (the amount by which the fair value of the Company’s stock exceeds the exercise price of the option) of the stock options outstanding, exercisable, and vested and expected to vest as of December 31, 2025 are as follows:

Restricted Stock Awards

A summary of RSA activity as of December 31, 2025 and 2024, and changes for the years then ended are set forth below:

Long-Term Incentive Plan

The Company maintained a long-term incentive plan (LTIP) that covers the period of January 1, 2023 through January 1, 2026. The LTIP has two components of equity-based compensation. The first is 250,000 Restricted Stock Awards (RSAs) that were granted to members of management on April 2, 2024 and vested 33% on the date of grant with the remainder to vest on January 1, 2025 and 2026, subject to continued service. The estimated fair value of these RSAs of $640,500 was recorded over the service period. The second is 250,000 Performance- based Restricted Stock Units (PSRUs) that would vest upon meeting certain revenue or adjusted EBITDA performance targets through December 31, 2025, subject to continued service. For the years ended December 31, 2025 and 2024, the performance targets were not met in the service period and accordingly no equity-based compensation was recognized.

Share-based Compensation Expense

Share-based compensation recognized under ASC 718-10 (including restricted stock awards) represents both stock options-based expense and restricted stock expense. The Company recognized share-based compensation expense for the years then ended December 31 as set forth below:

At December 31, 2025, the Company had approximately $0.7 million of total unrecognized share-based compensation expense, net of estimated forfeitures, related to share-based compensation that will be recognized over the weighted average remaining period of 1.2 years.