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Stock-Based Compensation
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]    
Stock-Based Compensation

9. Stock-Based Compensation

 

The Company recorded stock-based compensation expense in the following categories on the accompanying condensed consolidated statements of operations for the periods presented (in thousands):

 

   2024   2023 
   Three Months Ended September 30, 
   2024   2023 
Cost of revenue  $5   $- 
General and administrative   195    782 
Sales and marketing   2    - 
Research and development   5    16 
Total stock-based compensation expense  $207   $798 

 

   2024   2023 
   Nine Months Ended September 30, 
   2024   2023 
Cost of revenue  $13   $- 
General and administrative   416    1,014 
Sales and marketing   4    - 
Research and development   14    432 
Total stock-based compensation expense  $447   $1,446 

 

Equity incentive plan – summary

 

During 2023, the Company adopted the OneMedNet Corporation 2022 Equity Incentive Plan (the “2022 Plan”) and reserved an amount of shares of Common Stock equal to 10% of the number of shares of Common Stock of the Company following the Business Combination for issuance thereunder. The 2022 Plan became effective immediately upon the closing of the Business Combination and replaced the Legacy ONMD equity incentive plan.

 

Equity incentive plan – stock options

 

For the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense of $0 and $0.1 million, respectively, on its outstanding stock options.

 

For the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense of $34 thousand and $0.3 million, respectively, on its outstanding stock options.

 

Equity incentive plan – restricted stock units (“RSU”)

 

For the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense of $0.2 million and $0.7 million, respectively, on its outstanding restricted stock units.

 

For the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense of $1.1 million and $0.4 million, respectively, on its outstanding restricted stock units.

 

9. Stock Based Compensation

 

Stock Options

 

During 2020, the Company adopted an equity incentive plan (the “2020 Plan”), which provided for the granting of incentive and nonqualified stock options to employees, directors, and consultants of Legacy ONMD. As of December 31, 2020, the Company had reserved 3,000,000 shares of common stock under the 2020 Plan. Under the 2020 Plan, option awards were generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant; those option awards generally vested with a range of one to four years of continuous service and had ten-year contractual terms. Certain option awards provided for accelerated vesting if there was a change in control, as defined in the 2020 Plan. The 2020 Plan also permitted the granting of restricted stock and other stock-based awards. Unexercised options were cancelled upon termination of employment and became available for reissuance under the 2020 Plan.

 

 

At the Special Meeting held on October 17, 2023, Data Knights shareholders considered and approved the OneMedNet Corporation 2022 Equity Incentive Plan (the “2022 Plan”) and reserved an amount of shares of Common Stock equal to 10% of the number of shares of Common Stock of OneMedNet following the Business Combination for issuance thereunder. The 2022 Plan was approved by the Legacy ONMD Board of Directors on October 17, 2023. The 2022 Plan became effective immediately upon the Closing of the Business Combination and replaced the 2020 Plan.

 

Information with respect to options outstanding is summarized as follows:

 

       Weighted   Aggregate 
   Number of   Average   Intrinsic 
   Options   Exercise Price   Value 
Outstanding as of December 31, 2021   728,603   $1.00   $- 
Granted   511,440    1.00      
Exercised   (6,648)   1.00      
Cancelled   (319,539)   1.00      
Outstanding as of December 31, 2022   913,856   $1.00   $3,199 
Exercised   (613,510)   1.00      
Cancelled   (300,346)   1.00      
Outstanding as of December 31, 2023   -   $-   $- 
Vested and exercisable as of December 31, 2023   -    -   $- 

 

For the years ended December 31, 2023 and 2022, the Company recorded stock-based compensation expense of $0.4 million and $0.3 million, respectively, on its outstanding stock options. The Company has determined its share-based payments to be a Level 3 fair value measurement. For the year ended December 31, 2023 and 2022, the Company has used the Black-Scholes option pricing model and estimated no expected dividends and the following weighted average assumptions:

 

   For the year ended December 31, 
   2023   2022 
Risk-free interest rate   -    0.73% - 2.96%
Expected dividend yield   -    - 
Expected term in years   -    1.36 - 1.85 
Expected volatility   -    50.0% - 86.3%

 

On November 7, 2023, as part of the Business Combination, the 2020 Plan was cancelled and all vested shares were exercised and converted at the appropriate conversion ratio to Common Stock of the Company. The Company issued shares of Common Stock of 543,057 which represents 613,510 vested options less an exercise price of $1.00.

 

 

Restricted Stock Awards

 

Certain employees, directors and consultants have been awarded restricted stock. The restricted stock vesting consists of milestone and time-based vesting as well as compensation for services performed by the Board of Directors. The following table summarizes restricted stock award activity for the years ended December 31, 2023 and 2022:

 

       Weighted 
   Number of   Average Grant 
   Awards   Date Fair Value 
Nonvested as of December 31, 2021   -   $- 
Granted   354,551    4.80 
Vested   (177,276)   4.80 
Nonvested as of December 31, 2022   177,275   $1.48 
Granted   88,639    7.21 
Vested   (265,914)   5.60 
Nonvested as of December 31, 2023   -   $- 

 

The total fair value of the Company’s previous stock awards vested during the years ended December 31, 2023 and 2022 was $1.1 million and $1.5 million, respectively. On November 7, 2023, as part of the Business Combination, all vested shares were exercised and converted at the appropriate conversion ratio to Common Stock of the Company.

 

The Company recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations for the periods presented (in thousands):

 

   2023   2022 
   For the year ended December 31, 
   2023   2022 
Research and development  $434   $638 
General and administrative   1,041    1,227 
Total stock-based compensation expense  $1,475   $1,865