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Stockholders’ Equity
 3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Stockholders’ Equity

Note 5. Stockholders’ Equity

 

The following are changes in stockholders’ equity for the three months ended March 31, 2022 and 2023:

 

                     
           Additional         
   Common Stock   paid in   Accumulated     
   Shares   Amount   Capital   (Deficit)   Total 
Balance December 31, 2021   12,905,112   $       -   $60,341,000   $(52,165,000)  $8,176,000 
Shares issued for warrant exercise   986    -    5,000    -    5,000 
Equity-based compensation   -    -    28,000    -    28,000 
Issuance of stock and options for services   13,801    -    98,000    -    98,000 
Net loss   -    -    -    (895,000)   (895,000)
Balance March 31, 2022   12,919,899   $-   $60,472,000   $(53,060,000)  $7,412,000 

 

           Additional         
   Common Stock   paid in   Accumulated     
   Shares   Amount   Capital   (Deficit)   Total 
Balance December 31, 2022   12,934,741   $       -   $60,905,000   $(58,384,000)  $2,521,000 
Equity-based compensation   35,659    -    175,000    -    175,000 
Cash settlement of equity-based compensation   -    -    (24,000)   -    (24,000)
Issuance of stock and options for services   32,203    -    83,000    -    83,000 
Net loss   -    -    -    (910,000)  $(910,000)
Balance March 31, 2023   13,002,603   $-   $61,139,000   $(59,294,000)   1,845,000 

 

Warrants

 

During the three months ended March 31, 2023, 684,639 warrants at a weighted average exercise price of $5.85 per share expired.

 

Equity Incentive Plan

 

Through 2022, the Company issued equity awards under the 2015 Equity Incentive Plan (the “2015 Plan”) and outside the Plan. In March 2023, the Board of Directors adopted the 2023 Equity Incentive Plan (the “2023 Plan”), reserving 650,000 shares for future issuance, and discontinuing further grants under the 2015 Plan.

 

As of March 31, 2023, the Company has $227,000 of total unrecognized share-based compensation expense relative to unvested options, stock awards and stock units, which is expected to be recognized over the remaining weighted average period of 1.8 years.

 

 

Stock Options

 

The following is a summary of stock option activity for the three months ended March 31, 2023:

 

   Number of Options  

Weighted

average

exercise price

per share

  

Remaining

term in years

 
Outstanding on December 31, 2022   682,939   $7.30    3.2 
Issued   20,891   $1.62    8.0 
Cancelled/expired   (4,000)  $5.65      
Outstanding on March 31, 2023   699,830   $7.14    3.1 
                
Exercisable, March 31, 2023   638,110   $7.26    2.8 

 

The fair value of the options issued was calculated using the Black-Scholes option pricing model, based on the following:

 

   2023 
Expected term (in years)   8.0 
Expected volatility   84.4%
Risk-free interest rate   3.5%
Expected dividends  $- 
Weighted average grant date fair value per share  $1.31 

 

Restricted Stock

 

The following is a summary of restricted stock award and restricted stock unit activity for the three months ended March 31, 2023:

 

  

Number of

shares

  

Weighted

average grant

date fair value

 
Unvested at January 1, 2023   41,923   $4.92 
Granted   5,000   $1.25 
Vested   (4,386)  $5.06 
Forfeited   (4,054)  $5.39 
Unvested at March 31, 2023   38,483   $4.37 

 

 

Performance Stock Units

 

During 2022, the Company issued performance share units (“PSUs”) that represented shares potentially issuable based upon Company and individual performance in 2022.

 

The following table summarizes the activity for the Company’s unvested PSUs for the three months ended March 31, 2023:

 

   Number of shares  

Weighted

average grant

date fair value

 
Unvested at January 1, 2023   17,678   $4.50 
Cash settled   (17,678)  $4.50 
Granted   71,265   $1.36 
Vested   (45,251)  $1.36 
Unvested at March 31, 2023   26,014   $1.36 

 

In February 2023, the unvested awards issued for individual performance and outstanding at January 1, 2023 were modified to cash-settle the original grant-date fair value of approximately $80,000, resulting in incremental compensation of $56,000 after considering the $24,000 fair value of the vested shares at the date of the modification. Additionally, the Company performance targets were modified to allow approximately 71,000 PSU to vest, with an additional time-based vesting requirement for approximately 26,000 of the PSU. Because the awards did not vest based on the original terms, the modification was considered a new grant, resulting in $64,000 in compensation expense in the three-months ended March 31, 2023.

 

The Company adopted a 2023 PSU program in April 2023, granting approximately 172,000 PSUs at target performance. The results for the three-month period ended March 31, 2023 include $67,000 in stock-based compensation expense as management determined that the service inception date preceded the grant date.