NOTE 6: SHARE-BASED COMPENSATION

At December 31, 2025, the Company had stock-based compensation plans as described in detail below.

On August 11, 2025, the Company’s independent directors each received stock options to purchase 50,000 shares of our common stock with an exercise price of $1.26 per share. Fair value of these stock options was $0.81 per share at the date of grant. Twenty-five percent of the shares vested on each of August 31, 2025, November 30, 2025, February 28, 2026, and the remainder are scheduled to vest on May 31, 2026. In addition to the foregoing, all shares shall vest immediately prior to a change in control.

On August 11, 2025, the Company granted each independent director 23,810 shares of restricted stock. The shares vest on August 11, 2026. In addition to the foregoing, all shares shall vest immediately prior to a change in control.

On April 19, 2025, in connection with entering into the CFO Employment Agreement, the Company granted 80,000 shares of restricted stock, and options for 160,000 shares, to Kurt Keller. The stock options have an exercise price of $1.88 per share and had a fair value of $1.29 per share at the date of the grant. Each of the foregoing will vest in three equal installments on the anniversaries of the grant date.

On August 26, 2024, the Company’s independent directors each received stock options to purchase 50,000 shares of our common stock with an exercise price of $1.28 per share. Fair value of these stock options was $0.99 per share at the date of grant. Twenty-five percent of the shares vested on each of August 31, 2024, November 30, 2024, February 28, 2025, and May 31, 2025.

On March 6, 2024, in connection with entering into the CEO Employment Agreement, the Company granted 300,000 shares of restricted stock, and options for 300,000 shares, to Erik Wiik. The stock options have an exercise price of $0.56 per share and had a fair value of $0.35 per share at the date of the grant. Each of the foregoing will vest in three equal installments on the anniversaries of the grant date.

The fair value of each option award is estimated as of the date of grant using a Black-Scholes-Merton option pricing formula. Expected volatility is based on historical volatility of the Company’s stock over a preceding period commensurate with the expected term of the option. The expected term is based upon historical exercise patterns. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yield was not considered in the option pricing formula since the Company does not pay dividends and has not paid any dividends since its incorporation.

Weighted average Black-Scholes-Merton fair value assumptions

The following table summarizes the activity of our stock options for the years ended December 31, 2025, and 2024:

The following table summarizes the activity of restricted stock awards (RSAs) for the years ended December 31, 2025, and 2024:

For the years ended December 31, 2025 and 2024, we recognized a total of $237 and $178, respectively, of share-based compensation expense related to stock options, which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. The unamortized estimated fair value of nonvested stock options was $283 and $157 at December 31, 2025 and 2024, respectively. These costs are expected to be recognized as expenses over a weighted-average period of 1.22 and 1.82 years respectively.

For the years ended December 31, 2025, and 2024, we recognized a total of $138 and $46, respectively, of share-based compensation expense related to restricted stock awards, which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. The unamortized estimated fair value of nonvested stock awards was $254 and $122 at December 31, 2025 and 2024, respectively. These costs are expected to be recognized as expenses over a weighted-average period of 1.25 years and 2.25 years respectively.