Note 18. Stock-Based compensation

Stock-based compensation expense is recorded in selling, general and administrative expenses in the Consolidated Statements of Comprehensive Loss. For the years ended December 31, 2024 and 2023, stock-based compensation expense was approximately $1.6 million and $5.4 million, respectively. There were no income tax benefits recognized from stock-based compensation during the years ended December 31, 2024 and 2023 due to cumulative losses and valuation allowances.

Stock Award Plans

The Company maintains stock incentive plans to attract, motivate and retain management, key employees, directors, and consultants. These plans provide for discretionary awards of, among others, stock options, stock awards, stock unit awards, and stock appreciation rights to participants (collectively, share-based awards).

Restricted Stock Awards

The following table summarizes our restricted stock awards activity:

As of December 31, 2023, there was approximately $1.1 million of net unrecognized compensation cost related to unvested stock-based compensation to be recognized over the remaining weighted average period of 1.58 years.

As of December 31, 2024, there was no unrecognized compensation cost related to unvested stock-based compensation to be recognized as there were no outstanding awards.

Stock Options

Stock options outstanding at December 31, 2024 and 2023, as disclosed in the below table, have approximately $3,000 and $0.2 million of intrinsic value, respectively.

A summary of the status of the Company’s outstanding stock options and changes during the years ended December 31, 2024 and 2023, is as follows:

(1) Stock options granted as a result of the Progressive Care Merger on October 1, 2024.

On October 1, 2024, at 12:01 Eastern time, the Merger became effective and Progressive Care merged with and into Merger Sub and thereby became a wholly owned subsidiary of NextPlat. In connection with the Merger, each share of Progressive Care common stock that was issued and outstanding immediately prior to the effective time of the Merger was converted into 1.4865 shares of NextPlat common stock, and each warrant to purchase Progressive Care common stock that was outstanding and unexercised immediately prior to the effective time of the Merger automatically converted into a warrant to purchase shares of NextPlat common stock with each such warrant having and being subject to the same terms and conditions (including vesting and exercisability terms) as were applicable to such Progressive Care warrant immediately before the effective time.

For the year ended December 31, 2024, the Company granted 480,088 stock options valued at approximately $1.30 per option, using a Black-Scholes option pricing model with the following assumptions: stock price of $1.30 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 236% - 240%, expected term of 7 to 8 years and a risk free interest rate of 3.61% to 3.64%.

As of December 31, 2024, there was approximately $44,000 of net unrecognized compensation cost related to unvested stock options to be recognized over the remaining weighted average period of 3.27 years.

For the year ended  December 31, 2023, the Company granted 395,000 stock options valued at approximately $1.98 - $2.64 per option, using a Black-Scholes option pricing model with the following assumptions: stock price of $1.98 - $2.64 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 502% - 504%, expected term of 2 to 5 years and a risk free interest rate of 3.31% to 3.71%.

As of  December 31, 2023, there was approximately $1.4 million of net unrecognized compensation cost related to unvested stock options to be recognized over the remaining weighted average period of 2.88 years.