Perma-Pipe International Holdings, Inc. Stock Compensation Disclosure
Note 9 - Stock-based compensation
The Company has prior incentive plans under which previously granted awards remain outstanding, but under which no new awards may be granted, including the Company's 2021 Omnibus Stock Incentive Plan, which expired in May 2024. At January 31, 2025, the Company had reserved a total of 122,814 shares for grants and issuances under these incentive plans, including issuances pursuant to unvested or unexercised prior awards.
The Company's 2024 Omnibus Stock Incentive Plan dated May 28, 2024 was approved by the Company's stockholders in July 2024 ("2024 Plan"). The 2024 Plan will expire in July 2027. The 2024 Plan authorizes awards to officers, employees, consultants and independent directors. The 2024 Plan provides for the grant of deferred shares, non-qualified stock options, incentive stock options, restricted shares, restricted stock units, and performance-based restricted stock units intended to qualify under section 422 of the Internal Revenue Code.
Grants were made in connection with the 2024 Plan and the prior incentive plans to employees, officers, and independent directors, as further described below:
Stock compensation expense
The Company has granted stock-based compensation awards to eligible employees, officers or independent directors. The Company recognized the following stock-based compensation expense for the periods presented:
| 2024 | 2023 | |||||||
| Restricted stock based compensation expense | $ | 860 | $ | 913 | ||||
| Total stock-based compensation expense | $ | 860 | $ | 913 | ||||
Stock options
The Company did grant any stock options during the years ended January 31, 2025 or 2024. The following table summarizes the Company's stock option activity:
| Options | Weighted average exercise price | Weighted average remaining contractual term | Weighted average grant date fair value | |||||||||||||
| Outstanding on January 31, 2023 | 40 | $ | 10.85 | 1.12 | $ | 19 | ||||||||||
| Exercised | (1 | ) | 6.85 | |||||||||||||
| Expired or forfeited | (17 | ) | 11.15 | |||||||||||||
| Outstanding on January 31, 2024 | 22 | 11.15 | 0.7 | 6 | ||||||||||||
| Options exercisable on January 31, 2024 | 22 | $ | 11.15 | 0.7 | 6 | |||||||||||
| Exercised | (4 | ) | 6.89 | |||||||||||||
| Expired or forfeited | (17 | ) | 12.41 | |||||||||||||
| Outstanding on January 31, 2025 | 1 | 6.85 | 0.8 | 4 | ||||||||||||
| Options exercisable on January 31, 2025 | 1 | $ | 6.85 | 0.8 | $ | 4 | ||||||||||
There was no vesting, expiration or forfeiture of previously unvested stock options during the year ended January 31, 2025. In addition, there were no remaining unvested stock options outstanding, and therefore no unrecognized compensation expense related to unvested stock options during the year ended January 31, 2025.
Deferred stock
As part of their compensation, in previous years the Company granted deferred stock units to each non-employee director, equal to the result of dividing the award amount by the fair market value of the common stock on the date of grant. The stock vests on the date of grant; however, it is distributed to the directors only upon their separation from service. During the year ended January 31, 2025, no deferred stock units were distributed. There were approximately 62,926 deferred stock units outstanding included in the restricted stock activity shown below as of January 31, 2025 and 2024.
Restricted stock
The Company has granted restricted stock to executive officers, independent directors, and employees. The restricted stock vests ratably over to years. The Company calculates restricted stock compensation expense based on the grant date fair value and recognizes expense on a straight-line basis over the vesting period. The following table summarizes the Company's restricted stock activity:
| Restricted shares | Weighted average price per share | Weighted average grant date fair value | ||||||||||
| Outstanding on January 31, 2023 | 266 | $ | 8.55 | $ | 2,286 | |||||||
| Granted | 92 | 10.26 | ||||||||||
| Issued / vested | (84 | ) | ||||||||||
| Forfeited | (52 | ) | 9.59 | |||||||||
| Outstanding on January 31, 2024 | 222 | $ | 9.33 | $ | 2,078 | |||||||
| Granted | 111 | 8.93 | ||||||||||
| Issued / vested | (73 | ) | ||||||||||
| Forfeited | (29 | ) | 9.59 | |||||||||
| Outstanding on January 31, 2025 | 230 | $ | 9.05 | $ | 2,080 | |||||||
The fair value of vested restricted stock was $0.9 million and $1.1 million in the year ended January 31, 2025 and 2024 respectively. Additionally, there was $1.0 million of unrecognized compensation cost related to unvested restricted stock granted under the plans as of January 31, 2025 and 2024. These costs are expected to be recognized over the weighted-average period of 1.7 years and 1.8 years, respectively. Further, the Company had approximately 0.2 million of non-vested restricted stock granted under the plan as of January 31, 2025. The remaining amount of non-vested restricted stock is expected to vest over the weighted-average period of 1.7 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 1, 2025 | Showing above |
| 2024 | Apr 26, 2024 | |
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.