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Stockholders’ Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Stockholders’ Equity

Note 8. Stockholders’ Equity

 

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.

 

In 2023, the Company issued 1,315,491 shares of common stock pursuant to the conversion of debt and accrued interest, as more fully described in Note 6.

 

In 2023, the Company issued 165,779 shares of common stock for equity-based compensation. Additionally, 4,094 shares of common stock valued between $1.45 - $4.00 were issued for services.

 

Warrants

 

The following is a summary of changes in warrants outstanding for the years ended December 31, 2023 and 2022:

 

   Number of
warrants		 
Outstanding at December 31,2021   1,287,404 
Exercised   (986)
Expired   (106,228)
Outstanding at December 31, 2022   1,180,190 
Expired   (936,375)
Outstanding at December 31, 2023   243,815 

 

The following is a summary of all outstanding warrants as of December 31, 2023:

 

Warrant issuance event   Number of warrants     Weighted
average
exercise
price		    

Exercise price

per share

     Remaining
term in
years		     Intrinsic
value at
date of
grant		  
                               
Settlement of deferred compensation     243,815     $ 6.32     $ 3.51 - 9.10       0.74     $ -  

 

Equity Incentive Plan

 

Through 2022, the Company issued equity incentive 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.

 

Awards may be granted to employees, members of the Board of Directors and consultants, and 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, 2023, and issues new shares upon exercise of options or vesting of stock awards and stock units.

 

The Company has reserved approximately 493,000 and 43,000 respectively for awards outstanding under the 2015 Plan and 2023 Plan, and 162,000 shares for equity awards issued outside either of the Company’s equity incentive plans. As of December 31, 2023, 607,000 shares remain available for the issuance of awards under the 2023 Plan. Total shares reserved for awards that are outstanding and expected to vest or available for issuance is 1,305,000 as of December 31, 2023.

 

Stock-Based Compensation

 

The total amount of equity-based compensation included in general and administrative expense in the accompanying consolidated statements of operations was $290,000 and $386,000 for the years ended December 31, 2023 and 2022.

 

As of December 31, 2023, the Company has $93,000 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 1.3 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, 2021   635,889   $7.41    3.8 
Issued   64,672   $5.72    8.0 
Cancelled/expired   (17,622)  $5.08      
Outstanding on December 31, 2022   682,939   $7.30    3.2 
Issued   65,468   $1.50    8.0 
Cancelled/expired   (161,316)  $7.92      
Outstanding on December 31, 2023   587,091   $6.50    3.6 
                
Exercisable, December 31, 2023   526,389   $6.73    3.2 

 

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

 

    2023     2022  
Expected term (in years)     8       5.5 - 8  
Weighted average expected volatility     84.4 %     82.8% - 85.7 %
Weighted average risk-free interest rate     3.7 %     1.5% - 3.9 %
Expected dividends   $ -     $ -  
Weighted average grant date fair value per share   $ 1.21     $ 4.53  

 

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, 2022   -   $- 
Granted   46,554   $4.96 
Forfeited   (4,631)  $5.38 
Unvested at December 31, 2022   41,923   $4.92 
Granted   5,000   $1.25 
Vested   (4,386)  $5.06 
Forfeited   (9,931)  $3.33 
Unvested at December 31, 2023   32,606   $4.82 

 

Performance Stock Units

 

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

 

 

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 
Cash settled   (17,678)  $4.50 
Granted   288,469   $1.70 
Forfeited   (179,330)  $1.67 
Unvested and expected to vest at December 31, 2023   63,888   $1.84 

 

In February 2023, the awards granted for 2022 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, and were not included in the total unvested at December 31, 2022. As a result of the modifications, the Company recorded an additional $218,000 in compensation expense in 2023.