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Stockholders’ Equity
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Stockholders’ Equity

Note 6. Stockholders’ Equity

 

The following are changes in stockholders’ equity for the nine months ended September 30, 2023 and 2024:

 

                     
       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 
Issuance of common stock for equity compensation, net of shares repurchased for income tax withholding   165,779    -    (18,000)   -    (18,000)
Equity-based compensation expense   -    -    514,000    -    514,000 
Cash settlement of equity-based compensation   -    -    (24,000)   -    (24,000)
Issuance of stock for services   4,094    -    11,000    -    11,000 
Net loss   -    -    -    (2,123,000)   (2,123,000)
Balance September 30, 2023   13,104,614   $-   $61,388,000   $(60,095,000)  $1,293,000 

 

       Additional         
   Common Stock   paid in   Accumulated     
   Shares   Amount   Capital   (Deficit)   Total 
Balance December 31, 2023   14,420,105   $-   $63,299,000   $(60,796,000)  $2,503,000 
Issuance of common stock for equity compensation, net of shares repurchased for income tax withholding   201,859    -    (20,000)   -    (20,000)
Equity-based compensation expense   -    -    757,000    -    757,000 
Conversion of debt and interest (Note 5)   124,208    -    136,000    -    136,000 
Net loss   -    -    -    (1,973,000)   (1,973,000)
Balance September 30, 2024   14,746,172   $-   $64,172,000   $(62,769,000)  $1,403,000 

 

Warrants

 

During the nine months ended September 30, 2024, 122,739 warrants at a weighted average exercise price of $9.10 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. In March 2024, the Board of Directors amended the 2023 Plan to reserve an additional 650,000 shares for future issuance, bringing the total for the plan to 1,300,000, and to provide an evergreen provision that reserves additional shares depending on future non-plan issuances of common stock.

 

As of September 30, 2024, the Company has $545,000 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 2.8 years.

 

 

Stock Options

 

The following is a summary of stock option activity for the nine months ended September 30, 2024:

 

   Number of Options   Weighted average exercise price per share   Remaining term in years 
Outstanding on December 31, 2023   587,091   $6.50    3.6 
Issued   238,482   $2.05    8.0 
Expired   (71,930)  $7.95      
Outstanding on September 30, 2024   753,643   $4.95    5.3 
                
Exercisable, September 30, 2024   540,681   $5.98    3.8 

 

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

 

   2024 
Expected term (in years)   8.0 
Expected volatility   93.5%
Risk-free interest rate   4.2%
Expected dividends  $- 
Weighted average grant date fair value per share  $1.77 

 

Restricted Stock

 

The following is a summary of restricted stock award and restricted stock unit activity for the nine months ended September 30, 2024:

  

   Number of shares   Weighted average grant date fair value 
Unvested at January 1, 2024   32,606   $4.82 
Granted   65,000   $1.73 
Vested   (10,733)  $5.58 
Unvested at September 30, 2024   86,873   $2.41 

 

Performance Share Units

 

During 2023 and 2024, 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 nine months ended September 30, 2024:

  

   Number of shares   Weighted average grant date fair value 
Unvested at January 1, 2024   63,888   $1.70 
Granted   429,844   $1.22 
Vested   (55,217)  $1.15 
Unvested and expected to vest at September 30, 2024   438,515   $1.20 

 

 

In February 2023, the unvested awards issued and outstanding for individual performance under the 2022 PSU program 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 PSUs to vest, with an additional time-based vesting requirement for approximately 26,000 of the PSUs. 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 nine months ended September 30, 2023.

 

The Company adopted a 2024 PSU program in March 2024, granting approximately 430,000 PSUs at target performance against company-wide and individual performance metrics. The results for the three and nine months ended September 30, 2024 include $79,000 and $289,000, respectively, in expense for the 2024 PSU program. Estimates of expense associated with 2024 performance will be reassessed each quarter through the performance period.