XML 31 R19.htm IDEA: XBRL DOCUMENT v3.24.3
STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

 

11. STOCKHOLDERS’ EQUITY

 

Committed Equity Facility

 

In 2022, the Company entered into a Common Stock Purchase Agreement and Registration Rights Agreement with B. Riley Principal Capital II, LLC under which the Company issued 281,157 shares for approximately $3.0 million. As consideration for B. Riley’s commitment to purchase shares of the Company’s common stock, the Company issued B. Riley 10,484 shares of its common stock in both September 2022 and April 2023. The facility was terminated on October 1, 2024.

 

The Company issued 281,157 shares under the Purchase Agreement for $3.0 million in proceeds, of which $0.5 million was offset by the offering costs as of September 30, 2024.

 

Stock Options

 

Option activity for the nine months ended September 30, 2024 is as follows:

          
       Weighted 
   Number of   Average 
   Options   Exercise 
   Outstanding   Price 
Outstanding at December 31, 2023   481,858   $10.41 
Granted   292,000    5.58 
Forfeited   (70,200)   13.19 
Outstanding at September 30, 2024   703,658   $7.19 

 

The stock options terminate ten (10) years from the date of grant or upon termination of employment.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the table below and we assumed there would not be dividends paid during the life of the options granted during the nine months ended September 30, 2024 and 2023:

       
   Nine months ended
September 30, 2024		  

Nine months ended

September 30, 2023

Expected volatility  89.04% - 90.37%   90.2% - 94.5%
Expected term  6.5 - 7 Years   6.5 - 7 Years
Risk-free interest rate  3.67% - 4.25%   3.55% - 4.47%
Weighted-average FV  $4.45   $9.71

 

The Company’s stock option compensation expense was $0.2 million and $0.4 million for the three and nine months ended September 30, 2024, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2023. There was $1.8 million of total unrecognized compensation costs related to outstanding stock options at September 30, 2024 which will be recognized over 4.0 years. Total intrinsic value of options outstanding and options exercisable were $18 thousand and $0.2 million, respectively, as of September 30, 2024. The number of shares of common stock underlying stock options vested and unvested as of September 30, 2024 were 355,034 and 348,624, respectively.

 

Restricted Stock Units

 

In November 2022, the Company granted 142,500 restricted stock units (“RSUs”) and up to 142,500 performance stock units (“PSU”) to its Chief Executive Officer (“CEO”). For the RSUs, 50% vested upon the grant date, 25% vested on February 1, 2024 and 25% will vest on February 1, 2025. The number of shares that will be earned under the PSUs will be determined based on the achievement of specific performance metrics during the three-year period ending December 31, 2024.

 

142,500 PSUs and 35,625 RSUs remain outstanding as of September 30, 2024, with weighted-average grant-date fair values of $13.05 each.

 

Stock compensation expense related to the RSUs and PSUs was $0.3 million and $0.9 million during the three and nine months ended September 30, 2024, with $0.5 million in unrecognized stock compensation expense remaining to be recognized over 5 months as of September 30, 2024.

 

Restricted Stock Awards

 

The Company issues restricted stock to its non-employee members of its board of directors as compensation for such members’ services. Such grants generally vest ratably over four quarters.

 

The Company also previously issued restricted stock awards to its CEO, for which generally 50% of the shares granted vest ratably over four quarters and the remaining 50% vest ratably over twelve quarters. The common stock related to these awards are issued to an escrow account on the date of grant and released to the grantee upon vesting. The fair value is determined based on the closing stock price of the Company’s common stock on the date granted and the related expense is recognized ratably over the vesting period.

 

A summary of activity of the restricted stock awards for the nine months ended September 30, 2024 is as follows:

          
    

Nonvested

Shares

    

Weighted-

Average Grant-

Date Fair Value

 
Nonvested at December 31, 2023   1,238   $20.17 
Granted   80,645    6.20 
Vested   (56,374)   6.43 
Forfeited   (10,081)   6.21 
Nonvested at September 30, 2024   14,808   $6.48 

 

Stock compensation expense related to restricted stock awards was $0.4 million and $0.3 million during each of the nine months ended September 30, 2024 and 2023 respectively.

 

As of September 30, 2024, there were unvested shares of common stock representing $0.1 million of unrecognized restricted stock grant expense which will be recognized over 3 months.

 

Warrants

 

In 2023, the Company issued warrants to purchase up to 200,000 shares of the Company’s common stock at a price per share equal to $17.00 to a consultant for services to be provided over a five-year period. The warrants were immediately exercisable but are subject to repurchase by the Company until the required service is provided. The fair value of such warrants was $8.05 per share or $1.6 million on the date of grant using the Black-Scholes option-pricing model. This model incorporated certain assumptions for inputs including a risk-free market interest rate of 3.86%, an expected dividend yield of the underlying common stock of 0%, expected life of 2.5 years and expected volatility in the market value of the underlying common stock based on our historical volatility of 99.6%. The fair value of the warrants was recorded to prepaid expenses and other current assets to be recognized over the service period. During the nine months ended September 30, 2024, $0.2 million was recorded as expense and $1.1 million of cost has not been recognized and will be recognized over the next 3.5 years.

 

A summary of activity of warrants outstanding for the nine months ended September 30, 2024 is as follows:

          
  

Number of

Warrants

   Weighted Average Exercise Price 
Exercisable at December 31, 2023   610,745   $9.80 
Granted   –    – 
Expired   (282,334)   – 
Exercised   (128,411)   6.30 
Outstanding at September 30, 2024   200,000   $17.00 
Exercisable at September 30, 2024   200,000   $17.00 

 

Exercisable warrants as of September 30, 2024 have a weighted average remaining contractual life of 3.5 years. The intrinsic value of the exercisable shares of the warrants at September 30, 2024 was $0.0. Warrants to purchase 282,334 shares of common stock at an exercise price equal to $6.30 which were issued in our 2019 public offering expired on April 18, 2024.