Note 14 – Employee Benefit Plans

Defined Contribution Retirement Plan

The Company sponsors qualified defined contribution retirement plans (the “401(k) Plans”) covering all eligible employees, as defined in the 401(k) Plans. The 401(k) Plans allow participating employees to defer the receipt of a

portion of their compensation, on a pre-tax or post-tax basis, and contribute such amount to one or more investment options. Employer contributions to the plans are at the discretion of the Company. The Company did not accrue or make any employer contributions in 2024 and 2023.

Equity Incentive Plan

The Company provides equity-based compensation to directors, officers, key employees and other key individuals performing services for the Company under its 2019 Equity Incentive Plan (the “Equity Incentive Plan”). The Equity Incentive Plan provides for the granting of stock options, warrants, restricted stock or other stock-based awards. All awards are required to be approved by the Board or a designated committee of the Board. Options are generally granted with an exercise price equal to fair market value of the Company’s common stock on the date of grant and an expiration date after ten years. Vesting of options and restricted stock can either be based on the passage of time or on the achievement of performance goals. The Board has the authority to amend, modify or terminate the Equity Incentive Plan, subject to any required approval by the Company’s stockholders under applicable law or upon advice of counsel. No such action would affect any options previously granted under the Equity Incentive Plan without the consent of the holders.

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Effective May 18, 2022, the Board and the Company’s stockholders approved a 4,500,000 increase to the number of shares of common stock authorized for issuance under the Equity Incentive Plan, bringing the maximum aggregate limit to 11,573,922 shares. As of December 31, 2024, the Company had 2,804,491 shares available for issuance under the Equity Incentive Plan.

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Stock-based compensation cost for 2024 and 2023 was $6.0 million and $5.0 million, respectively, and is included in general and administrative expenses in the consolidated statements of operations. Included in stock-based compensation cost was $0.7 million and $0.5 million of unrestricted stock granted to directors for 2024 and 2023, respectively. Such grants were awarded consistent with the Board’s compensation practices. Stock-based compensation for 2024 and 2023 included $0.9 million and $0.7 million of compensation costs for market condition-based restricted stock units (“RSU”). Refer to discussion of performance stock units and CEO RSUs below.

Stock Option Activity

Stock options granted during 2024 were valued using the Black-Scholes method and included the following assumptions: a) expected term of 5.5 years, calculated using the simplified method, b) risk-free rate of 4.4% and c) volatility of 71.3%. The Company recognized $0.7 million in compensation costs for stock options during 2024. As of December 31, 2024, the Company had $0.2 million of unrecognized compensation costs related to 259,342 unvested stock options, which will be recognized over a weighted average period of 0.3 years. There were no unvested stock options as of December 31, 2023.

Changes in outstanding stock options during the years ended December 31, 2024 and 2023 were as follows:

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A summary of the status of the Company’s non-vested stock options as of December 31, 2024 and 2023 and changes during the years then ended, is presented below:

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The fair value of options that vested in 2024 and 2023 was zero.

Restricted Stock Unit Activity

The Company issues restricted stock units (“RSUs”) under the 2019 Equity Plan. RSUs in the table below include time-based awards. The fair value of time-based RSUs is determined based upon the closing market value of the Company’s common stock on the grant date.

A summary of the status of RSUs and changes during 2024 and 2023 is presented below:

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As of December 31, 2024, the Company had approximately $4.5 million of total unrecognized compensation costs related to restricted stock awards, which will be recognized over a weighted average period of 1.7 years.

Performance Stock Unit Activity

The Company issues performance stock units (“PSUs”) under the 2019 Equity Plan. PSUs in the table below includes both time based and market condition-based awards and are valued using the Monte Carlo Simulation.

Awards granted during September 2022 included 500,000 RSUs awarded to our Chief Executive Officer with both a market condition and time element (“CEO RSUs”). The CEO RSUs may be earned based on achieving common stock price targets within a 48-month period and, if earned, will vest and be settled based on a time element as outlined in the RSU agreement governing the CEO RSUs. To value the CEO RSUs, the Company, with the assistance of a third-party specialist, calculated the fair value of CEO RSUs using the Monte Carlo Simulation, a risk-free rate of 3.31%, a starting common stock value of $6.95, volatility of 73%, and a standard normal distribution. The Company valued the CEO RSUs at $2.9 million and amortized this amount evenly over 48 months. For 2024 and 2023, the Company recorded $0.7 million and $0.7 million, respectively, of stock-based compensation expense associated with these awards.

A summary of the status of PSUs and changes during 2024 and 2023 is presented below:

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As of December 31, 2024, the Company has approximately $1.2 million of unrecognized compensation costs related to PSUs, which will be recognized over a weighted average period of 1.7 years.