XML 30 R15.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Stock-Based Compensation
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

7.  Stock-Based Compensation

 

The following table summarizes the activity for all stock options outstanding for the three months ended March 31:

 

 

   2024   2023 
   Shares   Weighted
Average
Exercise Price		   Shares   Weighted
Average
Exercise Price		 
Options outstanding at beginning of year   2,815,392   $7.95    1,976,586   $6.34 
Granted   285,795    15.29    119,985    11.36 
Exercised   (36,550)   6.55    (24,122)   5.30 
Forfeited   (15,250)   9.05    (3,991)   6.55 
Balance at March 31   3,049,387   $8.65    2,068,458   $6.65 
                     
Options exercisable at March 31:   1,569,614   $6.55    1,114,767   $5.91 
                     
Weighted Average Grant Date Fair Value for options granted during the period:       $10.53        $7.81 

 

The following table summarizes additional information about stock options outstanding and exercisable at March 31, 2024:

 

Options Outstanding  Options Exercisable
Options
Outstanding		  Weighted
Average
Remaining
Contractual
Life		   Weighted
Average
Exercise
Price		   Aggregate
Intrinsic
Value		   Options
Exercisable		  Weighted
Average
Exercise Price		   Aggregate
Intrinsic
Value		 
3,049,387   7.95   $8.65   $39,506,833   1,569,614  $6.55   $23,646,843 

 

The Company recognized stock-based compensation expense for stock options of $1,290,193 and $1,222,328 for the three months ended March 31, 2024 and 2023, respectively. In May 2022, the Company modified the exercise price on 776,324 stock option awards to $5.50, the closing market price on the Nasdaq Capital Market on May 17, 2022. The effect of this modification on stock-based compensation was $26,719 and $39,612 for the three months ending March 31, 2024 and 2023, respectively. The effect of this modification on stock-based compensation over the remaining service period will be approximately $137,000. In December 2021, the Company modified the exercise price on 311,000 stock option awards to $13.44, the closing market price on the Nasdaq Capital Market on December 15, 2021. No director or officer awards were modified. The effect of this modification on stock-based compensation was $15,764 and $16,924 for the three months ended March 31, 2024 and 2023, respectively. The effect of this modification on stock-based compensation over the remaining service period will be approximately $82,000. In May 2020, the Company modified the exercise price on 203,750 stock option awards to $5.10, the closing market price on the Nasdaq Capital Market on May 14, 2020. No director or officer awards were modified. The effect of this modification on stock-based compensation was $696 and $7,108 for the three months ended March 31, 2024 and 2023, respectively. The effect of this modification on stock-based compensation over the remaining service period will be $0.

 

The Black-Scholes option-pricing model was used to estimate the fair value of equity-based awards with the following weighted-average assumptions for the three months ended March 31:

 

   2024   2023 
Risk-free interest rate   3.94% - 4.33%   3.64% - 4.14%
Expected volatility   76.1%   79.8%
Expected life (years)   5.25 to 6.08    5.25 to 6.08 
Expected dividend yield   0%   0%

 

The inputs for the Black-Scholes valuation model require management’s significant assumptions. Prior to the Company’s initial public offering, the price per share of common stock was determined by the Company’s board based on recent prices of common stock sold in private offerings. Subsequent to the initial public offering, the price per share of common stock is determined by using the closing market price on the Nasdaq Capital Market on the grant date. The risk-free interest rates are based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal to the expected life at the grant date. The expected life is based on the simplified method in accordance with the SEC Staff Accounting Bulletin Nos. 107 and 110. The expected volatility is estimated based on historical volatility information of peer companies that are publicly available in combination with the Company’s calculated volatility since being publicly traded.

 

All assumptions used to calculate the grant date fair value of non-employee options are generally consistent with the assumptions used for options granted to employees. In the event the Company terminates any of its consulting agreements, the unvested options issued in connection with the agreements would also be cancelled.

 

 

No restricted stock awards were granted during the three months ended March 31, 2024 and 2023. The Company had 1,958 and 3,273 shares of restricted stock outstanding as of March 31, 2024 and 2023, respectively, and 0 shares of restricted stock vested during the three months ended March 31, 2024 and 2023. The Company recognized stock-based compensation expense for restricted stock of $4,849 and $4,642 for the three months ended March 31, 2024 and 2023, respectively.

 

The Company initially reserved a maximum of 750,000 shares of common stock for issuance under the 2017 Amended and Restated Stock Incentive Plan (the “2017 Plan”). The number of shares reserved for issuance was automatically increased by 102,998, 149,189, 216,673, and 255,060 shares on January 1, 2021, 2022, 2023, and 2024, respectively, and will increase automatically on January 1 of each year from 2025 through 2028 by the number of shares equal to 1.0% of the aggregate number of outstanding shares of Company common stock as of the immediately preceding December 31. However, the Company’s board may reduce the amount of the increase in any particular year.

 

At the annual meeting held on May 12, 2021 and May 12, 2022, the stockholders approved a one-time, 500,000 increase each year for a total of 1,000,000 increase, to the number of shares reserved for issuance under the 2017 Plan. At the Annual Meeting held on May 11, 2023, the stockholders approved a one-time, 1,500,000 increase to the number of shares reserved for issuance under the 2017 Plan. The total remaining shares available for grant under the Company’s 2017 Plan as of March 31, 2024 was 1,003,414.

 

Total unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized at March 31, 2024:

 

      
2024  $3,661,229 
2025   3,483,405 
2026   2,496,276 
2027   1,501,013 
2028   48,146 
Total estimated compensation cost to be recognized  $11,190,069 

 

The Company recognized stock-based compensation expense related to its employee stock purchase plan of $36,304 and $46,312 for the three months ended March 31, 2024 and 2023, respectively. The Company initially reserved a total of 100,000 shares for issuance under the employee stock purchase plan. The number of shares reserved for issuance was automatically increased by 51,499, 74,594, 108,337, and 127,530 shares on January 1, 2021, 2022, 2023, and 2024, respectively, and will increase automatically on each subsequent January 1 by the number of shares equal to 0.5% of the total outstanding number of shares of Company common stock as of the immediately preceding December 31. However, the Company’s board may reduce the amount of the increase in any particular year. The total remaining shares available for issuance under the employee stock purchase plan as of March 31, 2024 was 394,165.

 

The Company recognized total stock-based compensation expense as follows for the three months ended March 31:

 

   2024   2023 
   Three Months Ended 
   March 31, 
   2024   2023 
Stock-based compensation expense in operating expenses:          
Research and development  $832,180   $654,471 
General and administrative   499,166    618,811 
Total  $1,331,346   $1,273,282