CVD EQUIPMENT CORP Stock Compensation Disclosure
A summary of the Company’s Share Incentive Plans are as follows:
2007 Share Incentive Plan
On December 12, 2007, shareholders approved the Company’s 2007 Share Incentive Plan (“2017 Incentive Plan”), in connection therewith, shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2017 Incentive Plan through December 12, 2017. The Plan expired in December 2017. As of December 31, 2024, there were options outstanding under this plan.
2016 Share Incentive Plan
On December 9, 2016, shareholders approved the Company’s 2016 Share Incentive Plan (“2016 Incentive Plan”), in connection therewith, shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2016 Incentive Plan through December 9, 2026. As of December 31, 2024, there were options outstanding under this plan.
2022 Share Incentive Plan
On July 14, 2022, shareholders approved the Company’s 2022 Share Incentive Plan (“2022 Incentive Plan”), in connection therewith, shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2022 Incentive Plan through July 14, 2032. As of December 31, 2024, there were options outstanding under this plan.
Under the 2016 and 2022 Share Incentive Plans, the purchase price of the common stock under each option plan shall be determined by the Committee, provided, however, that such purchase price shall not be less than the fair market value of the shares on the date such option is granted. The stock options generally expire to after the date of grant.
As of December 31, 2024, there were shares available for grant under the 2016 Equity Incentive Plan and shares available for grant under the 2022 Equity Incentive Plan.
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
Note 11 – Stock-Based Compensation (continued)
The Company recorded stock-based compensation of $ million and $ million for the years ended December 31, 2024 and 2023, respectively, that were included in the following line items in our Consolidated Statements of Operations (in thousands):
| 2024 | 2023 | |||||||
| Cost of revenue | $ | 152 | $ | 120 | ||||
| Research and development | 188 | 159 | ||||||
| Selling | 107 | 94 | ||||||
| General and administrative | 616 | 535 | ||||||
| Total stock-based compensation expense | $ | 1,063 | $ | 908 | ||||
Stock-based compensation expense in both years included approximately $ million related to restricted stock awards pursuant to a Director Compensation plan discussed below. The Company recognizes forfeitures of stock awards as they occur.
For the year ended December 31, 2024, the Company granted stock options, vesting % per year over four years, with a life. The Company determined the fair value of stock options granted during the year ended December 31, 2024 is based upon weighted average assumptions as provided below.
| Stock price | $ | 4.75 | ||
| Exercise price | $ | 4.75 | ||
| Dividend yield | % | |||
| Expected volatility | % | |||
| Risk-free interest rate | % | |||
| Expected life (in years) |
The expected life is the number of years the Company estimates that the awards will be outstanding based on the simplified method that considers the vesting period and contractual period of the option. The expected volatility is measured using historical daily price changes of the Company’s common stock over the respective expected term. The Company has of outstanding stock options under the three plans at December 31, 2024.
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
Note 11 – Stock-Based Compensation (continued)
| Weighted | ||||||||
Awards (in Shares) | Average Exercise Price | |||||||
| Outstanding at December 31, 2022 | 673,000 | $ | 11.26 | |||||
| Granted | 254,000 | 14.02 | ||||||
| Expired / cancelled | (44,500 | ) | 6.57 | |||||
| Exercised | (35,625 | ) | 4.53 | |||||
| Outstanding at December 31, 2023 | 846,875 | 8.20 | ||||||
| Granted | 5,000 | 4.75 | ||||||
| Expired / cancelled | (28,750 | ) | 7.94 | |||||
| Exercised | ||||||||
| Outstanding at December 31, 2024 | 823,125 | 8.24 | ||||||
At December 31, 2024 and 2023, stock options to purchase and , respectively, shares of common stock were exercisable.
| Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||
| Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||
| Average | Average | Average | ||||||||||||||||||||||||||||
| Exercise | Number | Remaining | Exercise | Intrinsic | Number | Exercise | Intrinsic | |||||||||||||||||||||||
| Price Range | Outstanding | Contractual | Price | Value | Exercisable | Price | Value | |||||||||||||||||||||||
| $ | - | 444,625 | $ | 4.39 | $ | 285,375 | $ | 5.86 | $ | 50,580 | ||||||||||||||||||||
| $ | - | 20,000 | $ | 8.07 | $ | 20,000 | $ | 8.07 | $ | |||||||||||||||||||||
| $ | - | 130,000 | $ | 10.62 | $ | 122,500 | $ | 10.55 | $ | |||||||||||||||||||||
| $ | - | 228,500 | $ | 14.11 | $ | 57,125 | $ | 14.11 | $ | |||||||||||||||||||||
As of December 31, 2024, there was $ million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of years.
Restricted Stock Awards
Pursuant to the Director Compensation plan approved on October 11, 2021, each of the five independent directors is entitled to compensation for an annual equity retainer in the amount of $ per director, to be automatically granted on the date of the Company’s annual meeting of shareholders.
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2024 and 2023
Note 11 – Stock-Based Compensation (continued)
| Weighted | ||||||||
| Average Grant | ||||||||
| Shares of | Date Fair | |||||||
| Restricted Stock | Value | |||||||
| Unvested outstanding at January 1, 2023 | $ | |||||||
| Granted | 41,320 | 6.65 | ||||||
| Vested | (24,187 | ) | 6.81 | |||||
| Forfeited or cancelled | ||||||||
| Unvested outstanding at December 31, 2023 | 17,133 | 6.53 | ||||||
| Granted | 57,327 | 3.55 | ||||||
| Vested | (46,210 | ) | 4.63 | |||||
| Forfeited or cancelled | ||||||||
| Unvested outstanding at December 31, 2024 | 28,250 | $ | 3.54 | |||||
The fair value of the restricted stock awards is recorded as stock-based compensation expense over the vesting period and totaled $ million for the both years ending December 31, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 19, 2025 | Showing above |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 27, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.