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Equity and Stock Compensation Plans | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Equity and Stock Compensation Plans | . EQUITY AND STOCK COMPENSATION PLANS Stock Option Plan – We have one active fixed stock option plan which is our 2001 Nonqualified Stock Plan (“2001 Plan”). We are authorized to grant nonqualified stock options, stock appreciation rights and stock awards to our employees and directors for up to 8,000,000 shares of common stock under this plan. As of December 31, 2022, there were 1,411,341 shares available for grant under the 2001 Plan. Options are granted at exercise prices as determined by the Board of Directors and have a maximum term of ten years. Options generally vest over three to five years. The following table presents stock-based compensation expenses included in our consolidated statements of operations and comprehensive loss (in thousands):
|  | Years ended December 31, |
|  | 2022 |  |  | 2021 |
Cost of services and other |  | $ | 21 |  |  | $ | 23 |
Research and development |  |  | 265 |  |  |  | 261 |
Selling and marketing |  |  | 286 |  |  |  | 250 |
General and administrative |  |  | 1,135 |  |  |  | 1,033 |
Stock-based compensation expense |  | $ | 1,707 |  |  | $ | 1,567 |
Stock-based compensation expense in the preceding table includes expenses associated with grants of: i) stock options, ii) unrestricted shares of our common stock; and iii) performance share awards. The methods used to determine stock-based compensation expense for each type of equity grant are described in the following paragraphs. Stock Option Grants. For the years ended December 31, 2022 and 2021, we granted zero and 2,875,000 stock options, respectively. We estimate the fair value of those stock options using the Black-Scholes valuation model. The Black-Scholes valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. We do not estimate our forfeiture rates as the actual forfeiture rate is known at the end of each reporting period due to the timing of our stock option vesting. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of stock options granted in the year ended December 31 2021. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. Unrestricted Stock Grants. Our 2001 Plan permits us to grant shares of unrestricted stock to our directors, officers, and employees. Stock-based compensation expense for stock grants is determined based on the fair market value of our stock on the date of grant; provided the number of shares in the grant is fixed on the grant date. We granted 167,921 and 56,553 shares of unrestricted stock to directors, officers, and employees during the years ended December 31, 2022 and 2021, respectively. Of the shares granted in 2022, 61,460 were issued shortly after June 30, 2022 and 46,461 were issued shortly after December 31, 2022. The remaining 60,000 shares of unrestricted stock granted to an officer is to be issued in four equal installments in February 2022, and August of 2022, 2023, and 2024. The unrestricted shares granted in 2021 were issued in two equal installments shortly after June 30, 2021 and December 31, 2021. Stock Options. Total options outstanding at December 31, 2022 and 2021 were as follows:
|  | 2022 |  |  | 2021 |
|  | Options |  |  | Weighted Average Exercise Price |  |  | Options |  |  | Weighted Average Exercise Price |
Outstanding at beginning of year |  |  | 3,240,000 |  |  | $ | 4.97 |  |  |  | 425,000 |  |  | $ | 6.00 |
Granted |  |  | - |  |  |  | - |  |  |  | 2,875,000 |  |  |  | 4.73 |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Forfeited or cancelled |  |  | (680,000 | ) |  |  | 5.00 |  |  |  | (60,000 | ) |  |  | 4.73 |
Outstanding at end of year |  |  | 2,560,000 |  |  | $ | 4.96 |  |  |  | 3,240,000 |  |  | $ | 4.97 |
Exercisable at year end |  |  | 250,000 |  |  | $ | 6.00 |  |  |  | 218,748 |  |  | $ | 6.00 |
At December 31, 2022, the weighted average remaining contractual term for total options outstanding and total options exercisable was approximately 8.01 and 6.97 years, respectively. At December 31, 2022, the aggregate intrinsic value of options outstanding and exercisable was $0. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The following table summarizes the stock options outstanding at December 31, 2022:
|  | Options Outstanding |  |  | Options Exercisable |
Exercise Price Range |  | Number |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (in years) |  |  | Number |  |  | Weighted Average Exercise Price |
$4 to $5 |  |  | 2,316,250 |  |  | $ | 4.72 |  |  |  | 8.11 |  |  |  | 62,500 |  |  | $ | 4.50 |
$5 to $6 |  |  | 81,250 |  |  | $ | 5.50 |  |  |  | 6.86 |  |  |  | 62,500 |  |  | $ | 5.50 |
$6 to $7 |  |  | 81,250 |  |  | $ | 6.50 |  |  |  | 6.86 |  |  |  | 62,500 |  |  | $ | 6.50 |
$7 to $8 |  |  | 81,250 |  |  | $ | 7.50 |  |  |  | 6.86 |  |  |  | 62,500 |  |  | $ | 7.50 |
|  |  | 2,560,000 |  |  | $ | 4.96 |  |  |  | 8.01 |  |  |  | 250,000 |  |  | $ | 6.00 |
At December 31, 2022, unrecognized compensation expense related to non-vested stock options was approximately $2.2 million, which is expected to be recognized over a weighted average period of 2.0 years. We issue common stock from previously authorized but unissued shares to satisfy option exercises and purchases under our Employee Stock Purchase Plan. Employee Stock Purchase Plan – In May 2021, we adopted the 2021 Employee Stock Purchase Plan (“2021 ESPP”) under which eligible employees could purchase common stock at a price equal to 85% of the lower of the fair market value of the common stock at the beginning or end of each six-month offering period. The 2021 ESPP Plan replaced our previous Employee Stock Purchase Plan (the “1996 ESPP”). Stock-based compensation expense related to our 2021 ESPP was $0.1 million in each of the years ended December 31, 2022 and 2021. Participation in the 2021 ESPP is limited to $25,000 worth of stock for each calendar year and may be terminated at any time by the employee and automatically ends on termination of employment. A total of 1,000,000 shares of common stock were reserved for issuance under the 2021 ESPP, and as of December 31, 2022, there were 870,435 shares available for future issuance thereunder. We issued 75,066 and 5 4,499 shares under the 2021 ESPP Plan during the years ended December 31, 2022 and 2021 respectively. We issued 0 and 6,972 shares under the 1996 ESPP in the years ended December 31, 2022 and 2021, respectively. Share Purchases - On March 1, 2022, our Board of Directors authorized a new stock repurchase program pursuant to which we may purchase up to $10.0 million of our common stock, of which $1.3 million has been repurchased as of December 31, 2022. During the year ended December 31, 2022 we repurchased 705,201 shares of our common stock. The shares were purchased from time to time in the open market at management’s discretion, depending upon market conditions and other factors. Repurchases where made under the program using our own cash resources and will in accordance with Rule 10b-18 under the Securities Exchange Act of 1934. The program does not obligate us to acquire any particular amount of common stock and the program may be modified or suspended at any time at our Board of Directors discretion. Dividends – We did not pay dividends in the years ended December 31, 2022 and 2021.

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