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Note 8 - Stock-Based Compensation
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

NOTE 8.     STOCK-BASED COMPENSATION

 

Under the Company’s stock option plans, the Board of Directors may grant restricted stock and options to purchase common shares to the Company’s employees, officers, directors and consultants. The Company accounts for stock options in accordance with FASB ASC Topic 718, Compensation - Stock Compensation, with stock-based compensation expense recognized over the vesting period based on the fair value on the grant date utilizing the Black-Scholes model, which includes a number of estimates that affect the grant date fair value and the amount of expense to recognize.

 

The Company recognized approximately $997,000 and $3,175,000, respectively, in stock-based compensation expense during the three and nine months ended September 30, 2024, as compared with $1,351,000 and $4,200,000, respectively, for the three and nine months ended September 30, 2023.

 

Stock option activity is summarized as follows:

      

Weighted average

 
  

Number of options

  

exercise price

 

Outstanding at December 31, 2023

  7,342,883  $6.31 

Granted

  1,587,929   2.26 

Exercised

  (569)  2.50 

Canceled and forfeited

  (673,653)  6.61 

Outstanding at September 30, 2024

  8,256,590  $5.51 

 

The Company allows stock option holders to exercise stock-based awards by surrendering stock-based awards with an intrinsic value equal to the cumulative exercise price of the stock-based awards being exercised, referred to as net settlements. These surrenders are included in stock options exercised in the options rollforward above. There were no such exercises for the three months ended September 30, 2024. For the three months ended September 30, 2023, the Company received 6,662 options as payment in the exercise of 5,338 options. For the nine months ended September 30, 2024 and 2023, respectively, the Company received 531 and 10,967 options as payment in the exercise of 38 and 11,033 options.

 

Common shares required to be issued upon the exercise of stock options would be issued from authorized and unissued shares. The Company calculated the grant date fair value of options granted in 2024 (“2024 Grants”) utilizing a Black-Scholes model.

 

  

2024 Grants

 

Strike price

 

1.02 - 2.42

 

Risk-free rate

 3.9% - 4.2% 

Expected dividend yield

 — 

Expected volatility

 92.1% - 95.1% 

Expected term (in years)

 6