As of December 31, 2025 and 2024, there were 795,910 and 760,150 shares, respectively, of the Company’s authorized common stock reserved for issuance upon exercise of outstanding options under its stock option plan.

The Company’s Articles of Incorporation provide that the Board of Directors has the authority, without further action by the holders of the outstanding common stock, to issue up to five million shares of preferred stock from time to time in one or more series. The Board of Directors shall fix the consideration to be paid, but not less than par value thereof, and to fix the terms of any such series, including dividend rights, dividend rates, conversion or exchange rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price and the liquidation preference of such series. As of December 31, 2025 and 2024, the Company does not have any preferred stock outstanding.

As of December 31, 2025, the Company has two stock option plans: the 2009 Long-Term Incentive Plan (“2009 Plan”), which ended in 2019, and the 2020 Long-Term Incentive Plan (“2020 Plan”).

Both the 2009 Plan and 2020 Plan authorize the grant of incentive stock options, non-qualified stock options, SARs, restricted stock, bonus stock, and performance shares to employees, consultants, and non-employee directors of the Company. The exercise price of each option shall not be less than the fair market value of the common stock at the date of grant. The total number of the Company’s shares that may be awarded under the 2009 Plan was 1,000,000 shares of common stock, and the 2020 Plan was 1,000,000 shares of common stock. As of December 31, 2025, there were options outstanding for 287,000 shares of common stock under the 2009 Plan and 508,910 shares of common stock under the 2020 Plan. As of December 31, 2024, there were options outstanding for 292,500 shares of common stock under the 2009 Plan and 467,650 shares of common stock under the 2020 Plan.

Options expire on the date determined, but not more than 10 years from the date of grant. All of the options granted under the 2009 Plan and 2020 Plan may be exercised in installments after a specified number of years upon the attainment of a specified length of service, as determined by the Compensation Committee and as set forth in the award terms. In the event of a change in control (as defined), the options will vest in full at the time of such change in control.

On April 1, 2025, the Company issued 45,100 shares of common stock upon the exercise of stock options. The Company received cash proceeds totaling $96,935 in connection with the exercise of these stock options. The total intrinsic value of the stock options exercised during the year ended December 31, 2025 was approximately $20,325. There were no stock options exercised during the year ended December 31, 2024.

Under the 2020 Plan, as of December 31, 2025, there were 491,090 shares of common stock reserved for the granting of additional options. The 2009 Plan expired at the end of 2019 and no additional options could be granted.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model that uses the weighted average assumptions noted in the following table. Expected volatilities are based on historical volatility of our stock through the date of grant. The Company uses the simplified method to estimate the options’ expected term. The risk-free interest rate used is based on the U.S. Treasury constant maturities at the time of grant having a term that approximates the expected life of the option.

The fair value of options granted during the year ended December 31, 2025 was $262,827. The fair value of options granted during the year ended December 31, 2024 was $104,445. The fair value of options at date of grant was estimated using the Black-Scholes model with the following weighted average assumptions:

The aggregate intrinsic value represents the total pre-tax intrinsic value, based on options with an exercise price less than the Company’s closing stock price of $2.70 and $3.03 as of December 31, 2025 and 2024, respectively, which would have been received by the option holders had those option holders exercised their options as of that date. The aggregate intrinsic value of options outstanding as of December 31, 2025 and 2024 was $409,965 and $673,741, respectively.

As of December 31, 2025, the total compensation cost related to unvested stock-based awards granted to employees under the Company’s stock option plan but not yet recognized was $584,220. This cost will be amortized over a weighted average term of 4.45 years and will be adjusted for subsequent changes in estimated forfeitures.


	Number of Shares			Weighted Average Grant Date Fair Value

Non-vested, beginning of year		405,910		$	1.39
Granted		172,700			2.60
Vested		(65,150	)		1.82
Expired or forfeited		(62,435	)		2.24

Non-vested, end of year		451,025		$	2.41

The Company applies ASC 718, Compensation–Stock Compensation (Topic 718) (“ASC 718”), to account for stock-based compensation. The following table summarizes the stock-based compensation expense for stock options that was recorded in the Company’s results of operations in accordance with ASC 718 for the years ended December 31, 2025 and 2024 as follows:

In January of 2022, the Company’s Board of Directors authorized a share repurchase program for the repurchase of up to $1,000,000 of the Company’s outstanding common stock. The Company has not repurchased any shares under this program.