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Stockholders’ Equity
 6 Months Ended
Jun. 30, 2023
Equity [Abstract]  
Stockholders’ Equity

Note 6. Stockholders’ Equity

 

The following are changes in stockholders’ equity for the six months ended June 30, 2022 and 2023:

 

                     
           Additional         
   Common Stock   paid in   Accumulated     
   Shares   Amount   Capital   (Deficit)   Total 
Balance December 31, 2021   12,905,112   $-   $60,341,000   $(51,838,000)  $8,503,000 
Shares issued for warrant exercise   986    -    5,000    -    5,000 
Equity-based compensation   -    -    93,000    -    93,000 
Issuance of stock and options for services   13,801    -    98,000    -    98,000 
                          
Net loss   -    -    -    (1,589,000)   (1,589,000)
Balance June 30, 2022   12,919,899   $-   $60,537,000   $(53,427,000)  $7,110,000 

 

           Additional         
   Common Stock   paid in   Accumulated     
   Shares   Amount   Capital   (Deficit)   Total 
Balance December 31, 2022   12,934,741   $-   $60,905,000   $(57,972,000)  $2,933,000 
                          
Equity-based compensation   35,659    -    118,000    -    118,000 
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   -    -    -    (1,647,000)   (1,647,000)
Balance June 30, 2023   13,002,603   $-   $61,082,000   $(59,619,000)  $1,463,000 

 

Warrants

 

During the six months ended June 30, 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 June 2023, the Company’s stockholders adopted the 2023 Equity Incentive Plan (the “2023 Plan”), reserving 650,000 shares for future issuance. The Board of Directors discontinued further grants under the 2015 Plan.

 

As of June 30, 2023, the Company has $194,000 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 1.7 years.

 

 

Stock Options

 

The following is a summary of stock option activity for the six months ended June 30, 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   42,045   $1.48    8.0 
Cancelled/expired   (108,871)  $8.38      
Outstanding on June 30, 2023   616,113   $6.71    3.6 
                
Exercisable, June 30, 2023   554,902   $6.96    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   3.6%
Expected dividends  $- 
Weighted average grant date fair value per share  $1.19 

 

Restricted Stock

 

The following is a summary of restricted stock award and restricted stock unit activity for the six months ended June 30, 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   (9,931)  $3.33 
Unvested at June 30, 2023   32,606   $4.82 

 

Performance Stock Units

 

During 2022 and 2023, the Company issued performance share units (“PSUs”) that represented shares potentially issuable based upon Company and individual performance in the years of issuance.

 

 

The following table summarizes the activity for the Company’s unvested PSUs for the three months ended June 30, 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   281,934   $1.58 
Vested   (45,251)  $1.36 
Unvested at June 30, 2023   236,683   $1.63 

 

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 six-months ended June 30, 2023.

 

The Company adopted a 2023 PSU program in April 2023, granting approximately 211,000 PSUs at target performance. The results for the three-month period ended June 30, 2023 include the reversal of $67,000 in stock-based compensation expense recorded in the three months ended March 31, 2023, as management does not anticipate at this time that 2023 performance will be achieved. The results of operations for the six months ended June 30, 2023 includes no expense for the 2023 PSU program. Estimates of expense associated with 2023 performance will be reassessed each quarter through the performance period.