Annual report pursuant to Section 13 and 15(d)

Stockholders??? Equity

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Stockholders’ Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Stockholders’ Equity

Note F – Stockholders’ Equity

 

The Company adopted a new 2022 Stock Incentive Plan, (the “2022 Plan”), approved by its Board of Directors on July 25, 2022 and its stockholders on September 20, 2022. The 2022 Plan provides for the grant of any or all of the following types of awards: (a) stock options, (b) restricted stock, (c) deferred stock, (d) stock appreciation rights, and (e) other stock-based awards including restricted stock units. Awards under the 2022 Plan may be granted singly, in combination, or in tandem. Subject to standard anti-dilution adjustments as provided, the 2022 Plan provides for an aggregate of 2,300,000 shares of the Company’s common stock to be available for distribution. The Company’s Compensation Committee generally has the authority to administer the 2022 Plan, determine participants who will be granted awards, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards. Awards under the 2022 Plan may be granted to employees, directors and consultants of the Company and its subsidiaries. As of December 31, 2023, there were 2,180,000 shares of common stock available for issuance under the 2022 Plan.

As of December 31, 2023, there were 75,000 shares of common stock subject to outstanding awards under the 2022 Plan and 512,500 shares of common stock subject to outstanding awards under the Company 2013 Stock Incentive Plan (“2013 Plan”). The Company discontinued issuing awards under its 2013 Plan as a result of the adoption of the 2022 Plan.

Restricted Stock Units

A summary of restricted stock units granted during the year ended December 31, 2023 and December 31, 2022 is as follows (each restricted stock unit represents the contingent right to receive one share of the Company’s common stock):

                               
    2023     2022  
    Number of Shares     Weighted-Average Grant
Date Fair Value		     Number of Shares     Weighted-Average Grant
Date Fair Value		  
Balance of restricted stock units outstanding at beginning of year     625,000     $ 1.87       12,500     $ 3.36  
                                 
Grants of restricted stock units     120,000       2.27       670,000       1.92  
                                 
Vested restricted stock units     (157,500 )     (2.43 )     (57,500 )     (2.73 )
                                 
Balance of restricted stock units outstanding at end of year     587,500     $ 1.81       625,000     $ 1.87  

 

 

Restricted stock unit compensation expense was $508,000 for the year ended December 31, 2023 and $585,000 for the year ended December 31, 2022.

The Company has an aggregate of $508,000 of unrecognized restricted stock unit compensation expense as of December 31, 2023 to be expensed over a weighted average period of approximately 2 years.

The fair value of restricted stock units is determined based on the number of shares granted and the quoted market price of the Company’s common stock on the date of grant for time-based and performance-based awards and fair value at grant date using the Monte Carlo simulation model for market-based awards(see Note B[10] hereof). The key inputs into the Monte Carlo simulation used to value the restricted stock units was a risk free rate of 2.39%, expected term of 4 years, expected volatility of 40% and a stock price of $2.47(see Note B[10] hereof).

All of the Company’s issued restricted stock units have dividend equivalent rights. As of December 31, 2023 and 2022, there was $99,000 and $37,000 accrued for dividend equivalent rights which were included in other accrued expenses.