Executive Compensation
Summary Compensation Table
The following table sets forth information concerning the compensation of our named executive officers for 2024 and 2023*(table and footnotes in whole dollars)*:
| Non-Equity |
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| Stock · Option · Incentive Plan · All Other |
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| Salary · Bonus · Awards · Awards · Compensation · Compensation · Total |
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| Name and Principal Position(a) | Years | ($) | ($)(b) | ($) | ($)(d) | ($)(e) | ($) | ($) |
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| Richard Mills | 2024 | 450,000 | — | — | — | — | — | 450,000 |
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| Chief Executive Officer and Director | 2023 | 450,000 | — | — | — | — | — | 450,000 |
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| Will Logan | 2024 | 350,000 | 50,000 | — | — | — | — | 400,000 |
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| Chief Financial Officer | 2023 | 350,000 | — | — | — | — | — | 350,000 |
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| (a) | Mr. Mills joined the Company effective October 15, 2015. Mr. Logan joined the Company effective November 6, 2017 and resigned as Chief Financial Officer on January 31, 2025. |
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| (b) | On November 13, 2024, the Company awarded Mr. Logan, a $50,000 bonus for his services rendered in 2023. |
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The material terms of employment agreements of Richard Mills, Chief Executive Officer of the Company, and Will Logan, Chief Financial Officer of the Company, and payments to be made upon a change in control are discussed below.
Our named executive officers are eligible for retirement benefits on the same terms as non-executives under the Company’s defined contribution 401(k) retirement plan. Employees may contribute pretax or after-tax compensation to the plan in accordance with current maximum contribution levels proscribed by the Internal Revenue Service. The Company contributes an employer contribution match of 50% of employee wages up to 6%, for an effective match of 3%.
Richard Mills Employment Agreement
The Company employs Richard Mills as its Chief Executive Officer. Mr. Mills and the Company entered into an employment agreement on November 12, 2021. The employment agreement is effective for a one-year term, which automatically renews for additional one-year periods unless either the Company or Mr. Mills elects not to extend the term. The agreement provided for an initial annual base salary of $330,000 subject to annual increases but generally not subject to decreases. In accordance with the agreement, Mr. Mills’ annual base salary was adjusted automatically on February 17, 2022 upon the closing of the Merger to $450,000, subject to annual increases but not generally subject to decreases. Under the agreement, Mr. Mills is eligible to participate in performance-based cash bonus or equity award plans for Company senior executives. Mr. Mills will participate in Company employee benefit plans, policies, programs, perquisites and arrangements to the extent he meets applicable eligibility requirements. In the event of a termination of employment for good reason, as defined, without cause, as defined, or within 12 months following a change in control, as defined, other than for reason of death, disability or for cause, Mr. Mills will be entitled to receive aggregate severance payments equal to twelve months of his base salary. The agreement provides that any severance payments would be paid in installments over the course of the severance. The agreement contains certain non-solicitation and non-competition provisions that continue after employment for a period of one year. The agreement also contains other customary restrictive and other covenants relating to the confidentiality of information, the ownership of inventions and other matters. On June 15, 2022, the Board approved an amendment to certain aspects of Mr. Mills’ compensation as further described below.
Will Logan Employment Agreement
The Company employed Will Logan as its Chief Financial Officer until his resignation effective January 31, 2025. Mr. Logan and the Company entered into an employment agreement on November 12, 2021. The employment agreement was effective for a one-year term, which automatically renewed for additional one-year periods through Mr. Logan’s resignation. The agreement provided for an initial annual base salary of $249,000 subject to annual increases but generally not subject to decreases. In accordance with the employment agreement, Mr. Logan’s annual base salary was automatically adjusted upon the closing of the Merger to $350,000, subject to annual increases but not generally subject to decreases, and Mr. Logan received a $75,000 cash bonus upon the closing of the Merger. Under the agreement, Mr. Logan was eligible to participate in performance-based cash bonus or equity award plans for Company senior executives. Mr. Logan participated in Company employee benefit plans, policies, programs, perquisites, and arrangements to the extent he met applicable eligibility requirements. In the event of a termination of employment for good reason, as defined, without cause, as defined, or within 12 months following a change in control, as defined, other than for reason of death, disability or for cause, Mr. Logan would have been entitled to receive aggregate severance payments equal to six months of his base salary. The agreement provided that any severance payments would be paid in installments over the course of the severance. The agreement contains certain non-solicitation and non-competition provisions that continue after employment for a period of one year. The agreement also contains other customary restrictive and other covenants relating to the confidentiality of information, the ownership of inventions and other matters. On June 15, 2022, the Board approved an amendment to certain aspects of Mr. Logan’s compensation as described below.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information concerning outstanding stock options and restricted stock awards held by our named executive officers as of December 31, 2024:
| Option Awards(a) · Stock Awards |
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| Market |
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| Number · value |
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| Number of · Number of · of shares · of shares |
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| Securities · Securities · or units of · or units of |
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| Underlying · Underlying · Option · stock · stock |
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| Unexercised | Unexercised | Exercise | Option | that has | that have |
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| Options (#) | Options (#) | Price | Expiration | not vested | not vested |
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| Name | Exercisable | Non-Exercisable | ($) | Date | (#) | ($) |
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| Richard Mills | 160,000(a) | —(a) | 7.59 | 6/1/2030 | — | — |
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| 160,000(b) | —(b) | 7.59 | 6/1/2030 | — | — |
| —(c) | 333,334(c) | 3.00 | 6/15/2032 | — | — |
| Will Logan | 6,389(d) | —(d) | 26.10 | 11/6/2027 | — | — |
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| 5,556(e) | —(e) | 22.50 | 9/20/2028 | — | — |
| 80,000(a) | —(a) | 7.59 | 6/1/2030 | — | — |
| 80,000(b) | —(b) | 7.59 | 6/1/2030 | — | — |
| —(c) | 200,000(c) | 3.00 | 6/15/2032 | |
| (a) | These stock options vested in three equal installments on June 1 annually, beginning in 2021 and ending in 2023. |
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| (b) | These stock options (the “Performance Options”) become vested in increments of 16.67 percent of the total shares purchasable under this issuance subject to satisfying Company revenue target and earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for the applicable year. In each of calendar years 2020, 2021 and 2022, one-third of the total shares may vest (if the revenue and EBITDA targets are met), and the shares that are subject to vesting each year are allocated equally to each of the revenue and EBITDA targets for such year, with each target and vesting being independently achieved without regard for the other. These Performance Options include a catch-up provision, where any options that did not vest during a prior year due to the Company’s failure to meet a prior revenue or EBITDA target may vest in a subsequent vesting year if the revenue or EBITDA target, as applicable, is met in the future year. The revenue and EBITDA targets for the subject years are as follows: |
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| Calendar Year | Revenue Target (millions) | EBITDA Target (millions) |
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| 2022 | $35 | $3.1 |
| 2023 | $38 | $3.5 |
The executives met the foregoing EBITDA target for calendar year 2021. On June 15, 2022, the Board approved of an amendment to the Performance Options to provide that the revenue target for the calendar year 2022 set forth therein ($38 million) is eliminated, and the remaining shares that are available for vesting under the Performance Options (106,667 unvested shares for Mr. Mills and 53,334 for Mr. Logan) (including the unvested portions of shares based on the satisfaction of the revenue targets for 2020 and 2021 by virtue of the catch-up provisions in the Performance Options) will fully vest upon the achievement of the updated EBITDA target for calendar year 2022 of $3.6 million.
The Performance Options state that the calculation of EBITDA set forth in the Performance Options shall be calculated in a form consistent with the Company’s 2022 approved budget, which:
| (i) | excludes any impact on EBITDA of: |
| (a) | the accounting treatment (including any “mark-to-market accounting”) of the Company’s warrants or the “Guaranteed Consideration” (as defined in the Merger Agreement), |
| (b) | non-recurring transaction expenses associated with the Merger and the capital raising financing activities of the Company to effectuate the Merger, and |
| (c) | any write-down or write-off of any Company inventory of Safe Space Solutions products. |
| (iii) | includes deductions related to any cash or stock bonuses paid or payable to any employees of the Company for services provided in calendar year 2022 (even if such bonuses are actually paid after calendar year 2022), including bonuses paid pursuant to the terms of the 2022 Cash Bonus Plan (as described above) (collectively, the “EBITDA Calculations”). |
The unvested portion of the Performance Options as of December 31, 2022 vested in full effective as of March 30, 2023 upon confirmation by the Board of Directors of achievement of the performance metrics for the year ended December 31, 2022.
| (c) | Messrs. Mills and Logan received ten-year options to purchase 333,334 and 200,000 shares of common stock, respectively (the “New Options”). The New Options are eligible to vest at any time on or prior to the date on which the “Guaranteed Price” is agreed upon by the Company and RSI Exit Corporation, or finally determined in accordance with the terms of the Merger Agreement, if the trailing 10-trading day VWAP of the Company’s common stock, as reported on the Nasdaq Capital Market, exceeds the share price targets below, subject to such executive serving the Company as a director, officer, employee or consultant at such time: |
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| Guaranteed · Total |
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| Executive · Share Price Targets · Price · Shares |
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| $6.00 | $9.00 | $12.00 | $15.00 | $18.00 | |
| Mills’ Shares Vested | 16,667 | 33,334 | 50,000 | 66,667 | 83,333 | 83,333 | 333,334 |
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| Logan’s Shares Vested | 10,000 | 20,000 | 30,000 | 40,000 | 50,000 | 50,000 | 200,000 |
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| Percentage of Shares Vested | 5% | 10% | 15% | 20% | 25% | 25% | |
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| (d) | These stock options become exercisable in increments of 25 percent of the total shares purchasable under this issuance on November 6 annually, beginning in 2018 and ending in 2021. |
| (e) | These stock options become exercisable in increments of 25 percent of the total shares purchasable under this issuance on September 20 annually, beginning in 2019 and ending in 2022. |
Director Compensation
The Company’s Board of Directors had a director compensation plan to compensate non-officer directors as follows:
| • | Annual grant of shares of unrestricted common stock of the Company, issuable on November 17, 2021, 2022 and 2023, having an annual value of $24,000, with the per-share price to be determined based upon the closing price of the Company’s common stock as reported on Nasdaq on such issuance date. No shares were issued on November 17, 2023 as the Company’s ability to issue shares under the 2014 Stock Incentive Plan expired. |
| • | An option issuable to each non-executive director to purchase 60,000 shares of Company common stock (or in the case of Dennis McGill, prior Chairman of the Company Board, 75,000 shares), which vested in three equal installments on November 17, 2021, 2022 and 2023, subject to continuing service as a director as of such vesting date. The exercise price of such options is $2.21, the closing price of the Company’s common stock as reported on Nasdaq on the date of adoption of such plan. |
The table below sets forth the compensation paid to Company non-employee directors during 2024:
| Director Compensation (table and footnotes in whole dollars) |
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| Fees · Nonqualified |
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| earned · Non-equity · deferred |
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| or paid · Stock · incentive plan · compensation · All other |
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| in cash | awards | Option awards | compensation | earnings | compensation | Total |
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| Name | ($)(a) | ($) | ($) | ($) | ($) | ($) | ($) |
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| David Bell | — | — | — | — | — | — | — |
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| Donald A. Harris | — | — | — | — | — | — | — |
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| Stephen Nesbit | — | — | — | — | — | — | — |
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| (a) | The Company is evaluating the terms by which its directors may be compensated for their services in 2024 and for subsequent years. As of the date of this Report, the Company has not adopted any plan for director compensation. |
Pay Versus Performance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid to our Principal Executive Officer (“PEO”) and our Principal Financial Officer (“PFO”) and certain financial performance of the Company.
| Pay Versus Performance |
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| Summary · Summary |
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| Compensation · Compensation · Compensation · Compensation · Value of Initial Fixed $100 |
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| Table Total for · Actually · Table Total for · Actually Paid to · Investment Based On: · Net Income(6) |
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| PEO(1) · Paid to PEO(2) · Non-PEO NEO(3) · Non-PEO NEO(4) · Total Shareholder Return(5) · (in thousands) |
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| Year | ($) | ($) | ($) | ($) | ($) | ($) |
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| (a) | (b) | (c) | (d) | (e) | (f) | (g) |
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| 2024 | 450,000 | 438,154 | 400,000 | 392,893 | 63 | (3,508) |
| 2023 | 450,000 | 498,678 | 350,000 | 373,292 | 61 | (2,937) |
| 2022 | 797,163 | 80,977 | 613,834 | 230,168 | 45 | 1,876 |
| (1) | The dollar amounts reported in column (b) are the amounts of total compensation reported for Richard Mills (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table." |
| (2) | The dollar amounts reported in column (c) represent the amounts of “compensation actually paid” to Mr. Mills, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Mills during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Mills’ total compensation for each year to determine the compensation actually paid: |
| Reported |
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| Summary |
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| Compensation · Reported · Equity · Compensation |
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| Table Total · Value of Equity · Awards · Actually Paid to |
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| for PEO · Awards(a) · Adjustments(b) · PEO |
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| Year | ($) | ($) | ($) | ($) |
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| 2024 | 450,000 | — | (11,846) | 438,154 |
| 2023 | 450,000 | — | 48,678 | 498,678 |
| 2022 | 797,163 | 253,119 | (463,067) | 80,977 |
| (a) | The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
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| (b) | The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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| Fair Value of |
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| Year over · Fair Value · Dividends or other |
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| Year over · Year Change in · at the End · Earnings Paid on |
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| Year Change in · Fair Value as of · Fair Value of · of the Prior Year · Stock or Option |
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| Fair Value of · Vesting Date of · Equity Awards · of Equity Awards · Awards not |
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| Year End · Outstanding · Equity Awards · Granted in · that Failed to · Otherwise Reflected · Total |
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| Fair Value · and Unvested · Granted · Prior Years · Meet Vesting · in Fair Value · Equity |
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| of Equity · Equity · and Vested · that Vested · Conditions · or Total · Award |
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| Awards · Awards · in the Year · in the Year · in the Year · Compensation · Adjustments |
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| Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
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| 2024 | — | (11,846) | — | — | — | — | (11,846) |
| 2023 | — | (10,465) | — | 59,143 | — | — | 48,678 |
| 2022 | 22,311 | (321,138) | — | (164,240) | — | — | (463,067) |
| (3) | The dollar amounts reported in column (d) represent the amounts reported for the NEO (excluding our PEO) in the “Total” column of the Summary Compensation Table in each applicable year. The NEO (excluding our PEO) included for purposes of calculating the amounts in each applicable year was Will Logan, our Chief Financial Officer as of the applicable time periods. |
| (4) | The dollar amounts reported in column (e) represent the amounts of “compensation actually paid” to the NEO (excluding our PEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEO (excluding our PEO) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEO (excluding our PEO) for each year to determine the compensation actually paid, using the same methodology described above in Note (2): |
| Reported |
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| Summary |
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| Compensation · Compensation |
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| Table Total · Reported · Equity · Actually Paid |
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| for Non-PEO · Value of · Awards · to Non-PEO |
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| NEO · Equity Awards(a) · Adjustments(b) · NEO |
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| Year | ($) | ($) | ($) | ($) |
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| 2024 | 400,000 | — | (7,107) | 392,893 |
| 2023 | 350,000 | — | 23,292 | 373,292 |
| 2022 | 613,834 | 151,872 | (231,794) | 230,168 |
| (a) | The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
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| (b) | The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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| Fair · Value of |
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| Year Over · Value as of · Year over Year · Fair Value · Dividends or other |
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| Year · Vesting Date · Change in · at the End of the · Earnings Paid on |
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| Change in · of Equity · Fair Value of · Prior Year of · Stock or Option |
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| Year End · Fair Value of · Awards · Equity Awards · Equity Awards that · Awards not · Total |
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| Fair Value · Outstanding and · Granted · Granted in Prior · Failed to Meet · Otherwise Reflected · Equity |
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| of Equity · Unvested · and Vested · Years that Vested · Vesting Conditions · in Fair Value or · Award |
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| Awards · Equity Awards · in the Year · in the Year · in the Year · Total Compensation · Adjustments |
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| Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
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| 2024 | — | (7,107) | — | — | — | — | (7,107) |
| 2023 | — | (6,279) | — | 29,571 | — | — | 23,292 |
| 2022 | 13,386 | (160,905) | — | (84,275) | — | — | (231,794) |
| (5) | Cumulative total shareholder return (Cumulative TSR) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
| (6) | The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. |
Analysis of the Information Presented in the Pay versus Performance Table
In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table above.
Compensation Actually Paid and Cumulative TSR
The following graph sets forth the relationship between Compensation Actually Paid to our PEO, the Compensation Actually Paid to our Non-PEO NEO, and the Company’s cumulative TSR over the three most recently completed fiscal years.
Compensation Actually Paid and Net Income
The following graph sets forth the relationship between Compensation Actually Paid to our PEO, the Compensation Actually Paid to our Non-PEO NEO, and the Company’s net income over the three most recently completed fiscal years.
Policies and Practices for Granting Certain Equity Awards
While the granting of options and other equity awards to officers, directors and other employees is not expressly addressed in our Insider Trading Policy, we generally follow the same principles set forth in the Insider Trading Policy when granting equity awards, including options, to our officers, directors and other employees with access to material nonpublic information. Generally our Board of Directors or Compensation Committee does not approve grants of such awards during a blackout period and does not take material nonpublic information into account when determining the timing and terms of such an award. Further, we do not have a policy or practice of timing the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
