NOTE 14. STOCK-BASED COMPENSATION PLAN

Under the Company’s current 2015 Stock Incentive Plan (the “2015 Plan”), the Company’s Board of Directors (the “Board of Directors”) has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees, directors, officers or consultants of the Company or its subsidiaries. The 2015 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted units. The aggregate number of shares of common stock that may be granted through awards under the 2015 Plan to any employee in any calendar year may not exceed 500 shares. The 2015 Plan will continue in effect until December 2025 unless terminated sooner. As of December 31, 2024, the number of shares authorized and reserved for issuance under the 2015 Plan is 10,187 shares, subject to automatic annual increase equal to 5% of the total number of shares of the Company’s outstanding common stock.

Options Granted:

During the year ended December 31, 2024, the Company issued stock options for an aggregate of 1,250 shares under the 2015 Plan to directors and employees of the Company. Of the 1,250 options, 1,140 options vest and become exercisable over a period of two years, 100 vest in four equal consecutive quarterly tranches from the date of grant, and 10 vest in one quarterly tranche from the date of grant. All of the issued stock options expire ten years from the date of the grant.

For computing the fair value of the stock-based awards, the fair value of each option grant has been estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions:

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Using these assumptions, the fair value of the stock options granted during the years ended December 31, 2024, 2023, and 2022 was $3,818, $186, and $3,661, respectively, which will be amortized as stock-based compensation expense over the vesting period of the options.

Restricted Stock Awards Granted:

On March 11, 2024, the Company issued and granted employees restricted stock awards of 100 restricted shares under the 2015 Plan, of which 50 and 50 shares will vest and become nonforfeitable on each March 11, 2025 and March 11, 2026, respectively. As these restricted stock awards vest over time, the fair value of the restricted stock was estimated as of the date of grant using the grant price of $6.75 per share. The grant date fair value of the restricted stock awards was approximately $675 which will be amortized over the expected term of 2 years.

Market Condition Restricted Shares Granted:

On March 14, 2023, the Company awarded the Executive Chairman 500 restricted shares under the 2015 Plan, of which 250 and 250 shares will vest if, on or before March 14, 2033, the Fair Market Value (as defined in the Plan) of the Company’s common stock shall have equaled or exceeded $15.00 and $18.00 per share for twenty consecutive trading days, respectively. For computing the fair value of the restricted shares with a market condition, the fair value of the restricted stock award grant has been estimated as of the date of grant using the Monte-Carlo pricing model with the assumptions below.

On March 4, 2022, the Company issued and granted to the Executive Chairman and certain employees restricted stock awards of 700 restricted shares under the 2015 Plan, of which 700 restricted shares will vest if, on or before March 4, 2032, the Fair Market Value (as defined in the Plan) of the Company’s common stock shall have equaled or exceeded $50.00 per share for twenty consecutive trading days. For computing the fair value of the restricted shares with a market condition, the fair value of the restricted stock award grant has been estimated as of the date of grant using the Monte-Carlo pricing model with the assumptions below.

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Using these assumptions, the fair value of the market condition restricted stock awards granted on March 14, 2023 and March 4, 2022 were approximately $4,046 and $10,761, respectively.

The total non-cash stock compensation expense for continuing operations related to stock options and restricted stock awards recorded by the Company was as follows:

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For the years ended December 31, 2024, 2023, and 2022, stock-based compensation costs were classified as selling, general and administrative expense. A summary of changes in outstanding options and restricted stock awards during the year ended December 31, 2024 is as follows:

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The following table summarizes the exercise price range, weighted average exercise price, and remaining contractual lives by significant ranges for options outstanding and exercisable as of December 31, 2024:

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The intrinsic value of options exercised was $160, $351, and $4,381 during the years ended December 31, 2024, 2023, and 2022, respectively. The intrinsic value of restricted stock awards vested was $722, $1,891, and $3,336 during the years ended December 31, 2024, 2023, and 2022, respectively. Total fair value of options vested during the years ended December 31, 2024, 2023, and 2022 was $1,050, $3,461, and $5,361, respectively. Total fair value of restricted stock awards vested during the years ended December 31, 2024, 2023, and 2022 was $877, $1,438, and $1,157, respectively.

The fair value of unvested restricted stock awards is determined based on the market price of our shares of common stock on the grant date or using the Monte-Carlo pricing model. As of December 31, 2024, there were 1,045 unvested stock options and unrecognized compensation cost of $2,139 related to unvested stock options, as well as 1,100 unvested restricted stock awards and unrecognized compensation cost of $4,339 related to unvested restricted stock awards. Unrecognized compensation cost of unvested stock options and restricted stock awards are expected to be recognized over the weighted average period of 1.0 years and 1.2 years, respectively.