XML 27 R16.htm IDEA: XBRL DOCUMENT v3.22.4
Stockholders’ Equity
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Stockholders’ Equity

Note 10. Stockholders’ Equity

 

On June 1, 2021, the Company completed a private placement of 1,282,051 shares of its common stock at $4.68 per share, resulting in gross proceeds of $6,000,000.

 

In 2021, holders of debt converted a total of $399,000 in principal and $234,410 in interest into 133,991 shares of common stock, and debt in the amount of $840,000 was retired (Note 7).

 

In 2021, the Company issued 17,273 shares of common stock, valued between $4.94 - $10.15 per share, for services rendered.

 

In 2021, the Company issued a warrant to purchase 10,550 shares of common stock at exercise prices ranging from $3.25 - $5.46 (weighted average $4.15) in exchange for services rendered.

 

In 2022, the Company issued 23,643 shares of common stock, valued between $5.00 - $5.16 per share, for services rendered. Additionally, 5,000 fully vested shares of common stock were granted and issued for equity-based compensation at a value of $4.50 per share.

 

In 2022, the Company issued 986 shares of common stock due to the exercise of a warrant at an exercise price of $5.07.

 

 

Warrants

 

The following is a summary of changes in warrants outstanding for the years ended December 31, 2022 and 2021:

 

   Number of
warrants		 
Outstanding at December 31,2020   2,204,303 
Issued   10,550 
Expired   (927,449)
Outstanding at December 31, 2021   1,287,404 
Exercised   (986)
Expired   (106,228)
Outstanding at December 31, 2022   1,180,190 

 

The following is a summary of all outstanding warrants as of December 31, 2022:

 

Warrant issuance event  Number of warrants   Weighted
average
exercise
price		  

Exercise price

per share

   Remaining
term in
years		   Intrinsic
value at
date of
grant		 
                     
Private placements of common stock   818,683   $6.03   $5.85 – 6.89    0.28   $           - 
Private placement of notes   117,692   $5.85   $5.85    0.22   $- 
Settlement of deferred compensation   243,815   $6.32   $3.51 - 9.10    1.74   $- 
    1,180,190   $6.07   $3.51 - 9.10    0.58   $- 

 

Equity Incentive Plan

 

Under the 2015 Equity Incentive Plan (the “2015 Plan”), the Company has reserved 1,153,846 shares for equity incentive awards for issuance to employees, members of the board of directors and other service providers. Awards may take the form of options, restricted stock, restricted stock units, performance shares and stock appreciation rights. The Company has issued options with no intrinsic value, stock awards and stock units through December 31, 2022, and issues new shares upon exercise of options or vesting of stock awards and stock units. As of December 31, 2022, there were 354,000 shares available for the issuance of awards under the 2015 Plan. The Company has reserved approximately 30,000 shares for equity awards issued outside of the 2015 Plan.

 

Stock-Based Compensation

 

The total amount of equity-based compensation included in general and administrative expense in the accompanying consolidated statements of operations was $386,000 and $92,000 for the years ended December 31, 2022 and 2021.

 

As of December 31, 2022, the Company has $281,000 of total unrecognized share-based compensation expense related to unvested options, stock awards and stock units, which is expected to be amortized over the remaining weighted average period of 1.9 years.

 

 

Stock Options

 

The following is a summary of stock option activity:

   Number of
Options		   Weighted
average
exercise price
per share		   Remaining
term in years		 
             
Outstanding on December 31, 2020   614,271   $7.61    3.8 
Issued   65,805   $5.63      
Cancelled/expired   (44,187)  $5.08      
Outstanding on December 31, 2021   635,889   $7.41    3.8 
Issued   64,672   $5.72      
Cancelled/expired   (17,622)  $5.08      
Outstanding on December 31, 2022   682,939   $7.30    3.2 
                
Exercisable, December 31, 2022   595,829   $7.54    2.7 

 

The fair value of the options issued was calculated using the Black-Sholes option pricing model, based on the criteria shown below:

 

   2022   2021 
Expected term (in years)   5.5 - 8     5.5 - 8  
Expected volatility   82.8% - 85.7%   85.0% - 89.4%
Risk-free interest rate   1.5% - 3.9%   0.7% - 1.3%
Expected dividends  $-   $- 
Weighted average grant date fair value per share  $4.53   $4.04 

 

Restricted Stock

 

The following is a summary of restricted stock award and restricted stock unit activity:

 

  

Number of

shares

  

Weighted

average grant

date fair value

 
Unvested at January 1, 2021   -   $- 
Unvested at January 1, 2022   -   $- 
Granted   46,554   $4.96 
Forfeited   (4,631)  $5.38 
Unvested at December 31, 2022   41,923   $4.91 

 

Performance Stock Units

 

During 2022, the Company issued performance share units (“PSUs”) that represent shares potentially issuable based upon achievement of Company and individual performance targets in 2022. The grantees have the ability to earn 0% - 200% of the PSU target award. The awards also included a time-based service requirement through March 2023.

 

 

The following is a summary of PSU activity:

 

  

Number of

shares

  

Weighted

average grant

date fair value

 
Unvested at January 1, 2022   -   $- 
Granted   123,512   $4.50 
Forfeited   (105,834)  $4.50 
Unvested at December 31, 2022   17,678   $4.50 

 

In February 2023, the awards were modified to pay the original grant-date fair value of the shares expected to vest in cash. Additionally, the Company performance targets were modified to allow approximately 77,000 shares to vest that would have otherwise been forfeited. As a result of the modifications, the Company expects to record an additional $218,000 in compensation expense, primarily in 2023.