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Stockholders’ Equity
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Stockholders’ Equity

Note 7. Stockholders’ Equity

 

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 5.

 

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.

 

In 2024, the Company issued 124,208 shares of common stock pursuant to the conversion of debt and accrued interest, as more fully described in Note 5.

 

In 2024, the Company issued 201,859 shares of common stock for equity-based compensation.

 

Warrants

 

The following is a summary of changes in warrants outstanding for the years ended December 31, 2024 and 2023:

 

   Number of
warrants		 
Outstanding at December 31, 2022   1,180,190 
Expired   (936,375)
Outstanding at December 31, 2023   243,815 
Expired   (122,739)
Outstanding at December 31, 2024   121,076 

 

 

The following is a summary of all outstanding warrants as of December 31, 2024:

 

Warrant issuance event  Number of warrants   Exercise price per share   Remaining term in years   Intrinsic value at date of grant 
                     
Settlement of deferred compensation   121,076   $3.51    0.24   $     - 

 

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 319,000 and 363,000, respectively for awards outstanding under the 2015 Plan and 2023 Plan, and 248,000 shares for equity awards issued outside either of the Company’s equity incentive plans. As of December 31, 2024, 822,000 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 are 1,752,000 as of December 31, 2024.

 

Employee Stock Purchase Plan

 

In 2024, the Company adopted an Employee Stock Purchase Plan (the “ESPP”) which permits employees to defer compensation to purchase shares at a 15% discount to the lower of the market price at the beginning or end of the deferment period. There were no deferrals in 2024. The Company reserved 1,400,000 shares for issuance under the ESPP.

 

Stock-Based Compensation

 

The total amount of equity-based compensation included in general and administrative expense in the accompanying consolidated statements of operations was $784,000 and $562,000 for the years ended December 31, 2024 and 2023.

 

As of December 31, 2024, the Company has $338,000 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 3.0 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, 2022   682,939   $7.30    3.2 
Issued   65,468   $1.50    8.0 
Forfeited   (4,254)  $5.65      
Expired   (157,062)  $7.92      
Outstanding on December 31, 2023   587,091   $6.50    3.6 
Issued   404,074   $4.80    8.0 
Forfeited   (178,669)  $7.39      
Expired   (102,173)  $8.38      
Outstanding on December 31, 2024   710,323   $5.04    5.5 
                
Exercisable, December 31, 2024   512,361   $5.77    4.1 

 

In December 2024, the Company modified 163,669 options that were expected to expire from December of 2024 through July of 2026 to extend the term through December 31, 2026. As a result of the modification, the Company recorded $110,000 of stock compensation expense, representing the fair value of the re-issued options compared to the fair value of the expiring options immediately prior to the modification.

 

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

 

   2024   2023 
Expected term (in years)   5.6    8.0 
Expected volatility   103.9%   84.4%
Risk-free interest rate   4.2%   3.7%
Expected dividends  $-   $- 
Weighted average grant date fair value per share  $1.53   $1.21 

 

 

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, 2023   41,923   $4.92 
Granted   5,000   $1.25 
Forfeited   (4,386)  $5.06 
Vested   (9,931)  $3.33 
Unvested at December 31, 2023   32,606   $4.82 
Granted   65,000   $1.73 
Forfeited   (25,000)  $1.64 
Vested   (10,733)  $5.58 
Unvested at December 31, 2024   61,873   $2.72 

 

Performance Stock Units

 

The Company issues 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 January 1, 2023   17,678   $4.50 
Cash settled   (17,678)  $4.50 
Granted   288,469   $1.70 
Forfeited   (224,581)  $1.67 
Unvested at December 31, 2023   63,888   $1.84 
Granted   429,844   $1.22 
Forfeited   (283,369)  $1.22 
Vested   (52,669)  $1.15 
Unvested and expected to vest at December 31, 2024   157,694   $1.20 

 

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.