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STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 4 — STOCK-BASED COMPENSATION

The Company maintains three equity incentive plans: the 2015 Stock Option Plan, as amended (the “2015 Plan”), the 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), and the 2024 Omnibus Equity Incentive Plan (the “2024 Plan”). All equity awards issued to employees, consultants, and non-employee directors on or after May 9, 2024 are issued from the 2024 Plan. The Company has also issued restricted stock and stock options as employment inducement awards outside of these plans to its Chief Executive Officer and Chief Commercial Officer, respectively.

The 2015 Plan provides for the grant of incentive stock options and nonqualified stock options. As of December 31, 2024, there were 2,035,000 shares reserved for outstanding awards under the 2015 Plan.

The 2021 Plan provides for the grant of incentive stock options, nonqualified stock options, stock awards, restricted stock awards, restricted stock units, performance share units, stock appreciation rights, and/or other equity-based awards to employees, consultants and directors. As of December 31, 2024, there were 127,248 shares reserved for outstanding awards under the 2021 Plan.

The 2024 Plan provides for the grant of incentive stock options, nonqualified stock options, stock awards, restricted stock awards, restricted stock units, performance share units, stock appreciation rights and/or other equity-based awards to employees, consultants and directors. Awards previously made under the 2015 Plan and the 2021 Plan that are forfeited or cancelled after May 9, 2024 will be available for issuance under the 2024 Plan. As of December 31, 2024, there were 799,254 shares reserved for outstanding awards and 2,320,440 shares available for issuance under the 2024 Plan.

Each non-employee director of the Company (other than the Chairman of the Board) is eligible to receive $110,000 annually, to be paid quarterly in arrears of $12,500 in cash and $15,000 in common stock. The Chairman of the Board is eligible to receive $140,000 annually, to be paid quarterly in arrears of $12,500 in cash and $22,500 in common stock. Prior to May 9, 2024 in the periods presented in this report, non-employee director equity compensation was issued from the Non-Employee Director Compensation Plan. From and after May 9, 2024 non-employee director equity compensation is issued from the 2024 Plan. All payments were and are pro-rated for partial service.

Restricted stock units (“RSUs”) and performance share units (“PSUs”) are equity classified and measured at the fair value of the underlying stock at the grant date.

Shares of stock granted for non-employee director fees are recorded at the fair value of the shares at the grant date.

The per share weighted average fair value of stock options granted during the year ended December 31, 2024 and December 31, 2023 was $1.44 and $1.84, respectively. The fair value of each award is estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the year ended December 31, 2024 and December 31, 2023. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of the U.S. Treasury issues with a term equal to the expected life of the option being valued.

Time-Vesting Stock Options

The following table summarizes the inputs into the Black-Scholes model for all time-vesting stock options granted during the year ended December 31, 2024.

Schedule of time based stock options

		December 31, 2024

Dividend yield			0.00%
Expected Volatility			51.9% - 68.04%
Expected dividends			—
Expected term (in years)			6.25
Risk-free rate			3.50% - 4.11%

The following table summarizes the status of the time-based stock options outstanding at December 31, 2024:

		Shares		Weighted Average Exercise Price

Outstanding at January 1		3,256,250		$	3.66
Granted		567,024			2.35
Exercised		(237,500	)		2.67
Forfeited		(898,750	)		4.86
Outstanding at December 31		2,687,024			3.07
Options exercisable at December 31		1,383,750			3.40
Weighted average fair value of options granted during the period		—		$	1.44

Total stock-based compensation expense for time-vested stock options was $1,530,446 for the years ended December 31, 2024. No cash was received from option exercises for the years ended December 31, 2024, and 2023. As of December 31, 2024, the intrinsic value of all time-based stock options was $2,085,186.

The following table presents information pertaining to time-based stock options outstanding at December 31, 2024:

Range of Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price			Number Exercisable		Weighted Average Exercise Price

$2.08-$3.98		2,687,024		7.4 years		$	3.07		1,383,750		$	3.40

As of December 31, 2024, there was $1,427,181 of total unrecognized compensation cost related to unvested share-based stock compensation awards granted under the Plans. That cost is expected to be recognized over a weighted-average period of 25 months.

Performance-Vesting Stock Options

The following table summarizes the activities for our unvested performance-vesting stock option awards for the year ended December 31, 2024.

		Shares		Weighted Average Grant-Date Fair Value

Unvested at January 1		200,000		$	1.48
Granted		—			—
Vested		(22,000	)		1.48
Forfeited/canceled		(44,666	)		1.48
Unvested at December 31		133,334		$	1.48

Total stock-based compensation expense for performance-vesting stock options was $21,778 year ended December 31, 2024. No cash was received from option exercises for the year ended December 31, 2024.

As of December 31, 2024, there was $183,206 of unrecognized compensation cost related to unvested employee performance options. This amount is expected to be recognized over a weighted-average period of 36 months.

Restricted Stock Awards, RSUs, and PSUs

The following table summarizes the activities for our unvested restricted stock awards, RSUs, and PSUs for the year ended December 31, 2024.

		Shares		Weighted Average Grant-Date Fair Value

Unvested at January 1		904,496		$	2.77
Granted		458,975			2.20
Vested		(81,789	)		3.45
Forfeited/canceled		(11,745	)		2.30
Unvested at December 31		1,269,937		$	2.54

Total stock-based compensation expense for restricted stock awards, RSUs, and PSUs was $579,519 for the year ended December 31, 2024.

As of December 31, 2024, there was $902,625 of unrecognized compensation cost related to unvested employee restricted stock awards, RSUs, and PSUs. This amount is expected to be recognized over a weighted-average period of 44 months.