Note 12 — Stock Compensation Plans

At a special shareholders meeting held on September 29, 2022, the Company’s shareholders approved the Company’s 2022 Equity Incentive Plan whereby 1,369,771 shares of the Company’s common stock were reserved from authorized but unissued shares for purposes of grants of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, performance shares and performance units to selected employees and non-employee directors of the Company. On May 21, 2026, the shareholders of the Company approved the Company’s 2026 Equity Incentive Plan whereby 204,335 shares of the Company’s common stock were reserved and available for issuance under the Plan.

The product of the number of shares granted and the grant date market price of the Company’s common stock determine the fair value of restricted stock under the Company’s Equity Incentive Plans. Management recognizes compensation expense for the fair value of restricted stock on a straight-line basis over the requisite service period for the entire award. As of June 30, 2026 and December 31, 2025, there were 204,335 and 19,335 aggregate shares available for future awards under the plans, respectively.

A summary of the Company’s restricted stock activity and related information for the three and six months ended June 30, 2026 follows:

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Compensation expense related to restricted stock was $308,000 and $293,000 for the three months, and $616,000 and $586,000 for the six months ended June 30, 2026 and 2025, respectively. At June 30, 2026, the total compensation cost related to non-vested restricted stock awards that has not yet been recognized was $1.6 million which cost is expected to be recognized over the next two years.

A summary of the Company’s stock option activity and related information for the three and six months ended June 30, 2026 follows:

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Compensation cost related to stock options is recognized based on the fair value of the stock options at the grant date on a straight-line basis over the vesting period. Compensation expense related to stock options was $213,000 and $186,000 for the three months, and $452,000 and $371,000 for the six months ended June 30, 2026 and 2025, respectively. At June 30, 2026, unrecognized compensation cost related to stock option awards was $1.3 million which is expected to be recognized over the next two years.