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Stockholders Equity | 9 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
Stockholders' Equity | Stockholders’ Equity Dividends Declared and Paid On November 11, 2022, the Company’s Board of Directors determined to suspend regular quarterly dividends. Future dividend policy will be subject to the discretion of the Company’s Board of Directors. 2014 Equity Participation Plan Effective August 12, 2014, the Company adopted the 2014 Equity Participation Plan (the “2014 Plan”) pursuant to which a maximum of 700,000 shares of Common Stock of the Company were initially authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and stock bonuses. Incentive stock options granted under the 2014 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). Non-statutory stock options granted under the 2014 Plan expire no later than ten years from the date of grant. The Board of Directors or the Compensation Committee determines the vesting provisions for stock awards granted under the 2014 Plan, subject to the provisions of the 2014 Plan. On August 5, 2020, the Company’s stockholders approved amendments to the 2014 Plan, including an increase in the maximum number of shares of Common Stock of the Company that are authorized to be issued pursuant to the 2014 Plan to 1,400,000. On August 9, 2023, the Company’s stockholders approved an amendment to the 2014 Plan to increase the maximum number of shares of Common Stock of the Company that are authorized to be issued pursuant to the 2014 Plan to 1,900,000. The 2014 Plan terminated on August 12, 2024 and no further awards may be granted under the 2014 Plan after such date. 2024 Equity Participation Plan Effective August 7, 2024, the Company adopted the 2024 Equity Participation Plan (the “2024 Plan”). pursuant to which a maximum of 1,000,000 shares of Common Stock of the Company are authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, and stock bonus awards. Incentive stock options granted under the 2024 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). Non-statutory stock options granted under the 2024 Plan expire no later than ten years from the date of grant. The Board of Directors or the Compensation Committee determines the vesting provisions for stock awards granted under the 2024 Plan, subject to the provisions of the 2024 Plan. The 2024 Plan terminates on May 10, 2034 and no further awards may be granted under the 2024 Plan after such date. As of September 30, 2024, there were no grants issued under the 2024 Plan. Stock Options The results of operations for the three months ended September 30, 2024 and 2023 include stock-based compensation expense for stock options totaling approximately $53,000 and $-0-, respectively. The results of operations for the nine months ended September 30, 2024 and 2023 include stock-based compensation expense for stock options totaling approximately $159,000 and $-0-, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of operations and comprehensive income (loss). Stock-based compensation expense related to stock options for the nine months ended September 30, 2024 is net of estimated forfeitures of approximately 12%. Such amounts have been included in the condensed consolidated statements of operations and comprehensive income (loss) within other operating expenses. The weighted average estimated fair value of stock options granted during the nine months ended September 30, 2024 was $1.24 per share. No options were granted during the nine months ended September 30, 2023. The fair value of stock options at the grant date was estimated using the Black-Scholes option-pricing model. The Black-Scholes option - pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options. The following weighted average assumptions were used for grants during the following periods:
| Nine months ended September 30,
| 2024 |  | 2023
Dividend Yield | 0.00 | % |  | n/a
Volatility | 74.72 | % |  | n/a
Risk-Free Interest Rate | 4.17 | % |  | n/a
Expected Life | 3.50 years |  | n/a
A summary of stock option activity under the Company’s 2014 Plan for the nine months ended September 30, 2024 is as follows:
Stock Options |  | Number of Shares |  | Weighted Average Exercise Price per Share |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
Outstanding at January 1, 2024 |  | 107,201 |  | $ | 8.31 |  |  | 0.94 |  | $ | - |
Granted |  | 318,750 |  | $ | 2.25 |  |  | 4.34 |  | $ | 2,199,375 |
Exercised |  | (50,000) |  |  | $ | 8.72 |  |  | - |  | $ | 25,000 |
Expired/Forfeited |  | (46,250) |  | $ | 2.25 |  |  | 4.67 |  | $ | 112,238 |
Outstanding at September 30, 2024 |  | 329,701 |  | $ | 3.24 |  |  | 3.56 |  | $ | 1,948,716 |
Vested and Exercisable at September 30, 2024 |  | 57,201 |  | $ | 7.95 |  |  | 0.32 |  | $ | 68,466 |
The aggregate intrinsic value of options outstanding and options exercisable at September 30, 2024 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Common Stock for the options that had exercise prices that were lower than the $9.15 closing price of the Company’s Common Stock on September 30, 2024. The total intrinsic value of options when forfeited are determined as of the date of forfeiture. The total intrinsic value of options when expired are determined as of the date of expiration. Participants in the 2014 Plan may exercise their outstanding vested options, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the option being exercised ("Net Exercise"), or by exchanging a number of shares owned for a period of greater than one year having a fair market value equal to the exercise price of the option being exercised ("Share Exchange"). The Company received 35,248 shares from the exercise of options under a Share Exchange for the purchase of 37,269 shares of Common Stock during the three and nine months ended September 30, 2024. Such shares received under the Share Exchange have been included in the condensed consolidated balance sheets within treasury stock. The remaining 12,731 options exercised during the three and nine months ended September 30, 2024 were Net Exercises, resulting in the issuance of 690 shares of Common Stock. No options were exercised during the three and nine months ended September 30, 2023. As of September 30, 2024, the estimated fair value of unamortized compensation cost related to 272,500 unvested stock option awards was approximately $132,000. Unamortized compensation cost as of September 30, 2024 is expected to be recognized over a remaining weighted-average vesting period of 2.27 years. Restricted Stock Awards A summary of the restricted Common Stock activity under the 2014 Plan for nine months ended September 30, 2024 is as follows:
Restricted Stock Awards |  | Shares |  | Weighted Average Grant Date Fair Value per Share |  | Aggregate Fair Value
Balance at January 1, 2024 |  | 550,581 |  | $ | 3.82 |  |  | $ | 2,103,219 |
Granted |  | 178,459 |  | $ | 2.33 |  |  | $ | 416,211 |
Vested |  | (446,044) |  | $ | 4.16 |  |  | $ | (1,855,543) |
Forfeited |  | (2,000) |  | $ | 4.80 |  |  | $ | (9,600) |
Balance at September 30, 2024 |  | 280,996 |  | $ | 2.33 |  |  | $ | 654,721 |
Fair value was calculated using the closing price of the Company’s Common Stock on the grant date. For the three months ended September 30, 2024 and 2023, stock-based compensation for these grants was approximately $306,000 and $207,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of operations and comprehensive income (loss). For the nine months ended September 30, 2024 and 2023, stock-based compensation for these grants was approximately $747,000 and $636,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of operations and comprehensive income (loss). These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be recognized by the directors, executives and employees. Warrants In connection with the 2022 Exchange Agreement (see Note 7 – Debt – “Exchange Agreements”), as additional consideration, on December 15, 2022, the Company issued warrants (the "Warrants") to the 2022 Exchanging Noteholders to purchase 969,525 shares of Common Stock. Pursuant to the 2024 Exchange Agreement, the expiration date of the Warrants was extended to June 30, 2026 from December 30, 2025. The fair value of the Warrants, using the Black-Scholes valuation formula, was $993,200, which has been capitalized as a deferred financing cost of the 2022 Notes and the 2024 Notes. The fair value of the Warrants is being amortized over the life of the Warrants, which is 36.5 months through September 12, 2024 and effective as of such date, the unamortized balance is being amortized over the extended life of the Warrants, which is now 21.5 months. In accordance with ASC 815-40-35 - Derivatives and Hedging – Subsequent Measurement, the effect of a modification or an exchange shall be measured as the difference between the fair value of the modified or exchanged instrument and the fair value of that instrument immediately before it is modified or exchanged. The Company calculated the respective fair values and determined the difference was immaterial. The Warrants are exercisable through June 30, 2026 at an exercise price of $1.00 per share. Holders of the Warrants may exercise their outstanding Warrants in cash, or, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the Warrants being exercised ("Net Exercise"). During the three and nine months ended September 30, 2024, Holders exercised 67,500 Warrants under Net Exercises, resulting in the issuance of 60,557 shares of Common Stock. No Warrants were exercised during the three and nine months ended September 30, 2023. As of September 30, 2024, Warrants for the purchase of an aggregate of 902,025 shares of Common Stock were outstanding. No warrants were granted during the nine months ended September 30, 2024 and 2023. Shelf Registration On April 5, 2024, the Company filed a shelf registration statement on Form S-3 with the SEC under the Securities Act of 1933, as amended, with regard to the registration of $50,000,000 of its equity and debt securities (the “Shelf Registration Statement”). The Shelf Registration Statement was declared effective by the SEC on April 22, 2024. Any offering made pursuant to the Shelf Registration Statement may only be made by means of a prospectus, including a prospectus supplement, forming a part of the effective Shelf Registration Statement, relating to the offering. At-the-Market Offering In May 2024, the Company entered into a Sales Agreement with Janney Montgomery Scott LLC (the “Sales Agent”) under which the Company currently has the ability to issue and sell shares of its Common Stock, from time to time, through the Sales Agent, pursuant to the Shelf Registration Statement, up to an aggregate offering price of approximately $16,400,000 in what is commonly referred to as an “at-the-market” (“ATM”) program. During the three months ended September 30, 2024, the Company sold 1,079,601 shares of its Common Stock at a weighted average price of $8.48 per share and raised $8,897,908 in net proceeds under the ATM program. During the nine months ended September 30, 2024, the Company sold 1,135,710 shares of its Common Stock at a weighted average price of $8.30 per share and raised $9,066,098 in net proceeds under the ATM program. As of September 30, 2024, the Company had remaining capacity to sell up to an additional $6,973,231 of Common Stock under the ATM program.

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