XML 24 R12.htm IDEA: XBRL DOCUMENT

Note 6 - Share-based Compensation

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 6: Share-Based Compensation

Description of Equity Plans

The 2021 Equity Incentive Award Plan (the “2021 Plan”) was adopted by the Company’s Board of Directors on April 9, 2021 and approved by the Company’s Annual Meeting of Shareholders (the “Annual Meeting”) on June 11, 2021. The 2021 Plan serves as a successor to the Company’s 2011 Equity Incentive Plan (the “2011 Plan”). Since the adoption of the 2021 Plan, all equity awards were made from the 2021 Plan and no additional awards will be granted under the 2011 Plan. The 2021 Plan provides for the issuance of a variety of share-based compensation awards, including stock options, restricted stock awards, restricted stock unit awards, performance awards, dividend equivalents awards, deferred stock awards, stock payment awards and stock appreciation rights. As of April 16, 2021, the 2021 Plan increased the number of shares available for grant by 3,000,000 in addition to the number of shares remaining available for the grant of new awards under the 2011 Plan.

As of March 31, 2025, the Company had 6,304,597 stock options outstanding and 96,984 unvested restricted stock units in addition to 1,255,606 shares of common stock available for grant under the 2021 Plan. As of December 31, 2024, the Company had 5,788,597 stock options outstanding and 117,925 unvested restricted stock units in addition to 2,056,629 shares of common stock available for grant under the 2021 Plan.

Stock Options

Options are granted to purchase common stock at prices that are equal to the fair value of the common stock on the date the option is granted. Vesting is determined by the Board of Directors at the time of grant. The term of any stock option awards under the Company’s 2011 Plan and 2021 Plan is ten years, except for certain options granted to the contractors which are either two or five years.

The grant-date fair value of each option grant is estimated using the Black-Scholes option pricing model and amortized on a straight-line basis over the requisite service period, which is generally the vesting period, for each separately vesting portion of the award as if the award was, in substance, multiple awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including the following.

Risk-free interest rate. The risk-free interest rate is based on U.S. Treasury rates with securities approximating the expected lives of options at the date of grant.

Expected dividend yield. The expected dividend yield is zero, as the Company has never paid dividends to common shareholders and does not currently anticipate paying any in the foreseeable future.

Expected stock price volatility. The expected stock price volatility was calculated based on the Company’s own volatility since the DuPont Transaction in 2015. The Company reviews its volatility assumption on an annual basis and has used the Company’s historical volatilities since 2016, as the DuPont Transaction resulted in significant changes in the Company’s business and capital structure.

Expected life of option. The expected life of option was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. The Company uses the weighted average vesting period and contractual term of the option as the best estimate of the expected life of a new option.

The assumptions used in the Black-Scholes option pricing model for stock options granted for the three months ended March 31, 2025, are as follows:

Risk-Free interest rate			4.20% - 4.43%
Expected dividend yield			—%
Expected stock price volatility			65.4%
Expected life of options (in years)			0.83-6.25

The following table summarizes the stock option activities for the three months ended March 31, 2025:

										*Weighted-Average*
						*Weighted-Average*				*Remaining Contractual*				*Aggregate Intrinsic*
		*Shares*				*Exercise Price*				*Term (Years)*				*Value*
Outstanding at December 31, 2024			5,788,597			$	2.97				5.34			$	655,578
Granted ⁽¹⁾			673,500				1.74
Exercised (2)			(55,000	)			1.17
Canceled (3)			(102,500	)			3.47
Outstanding at March 31, 2025			6,304,597			$	2.85				5.53			$	—

Exercisable at March 31, 2025			5,055,247			$	3.09				4.71			$	—

_________________

Notes:

(1) Represents the following options granted:

•

Annual share-based compensation awards on January 2, 2025, with an exercise price of $1.74, including: (a) 356,500 stock options granted to executives and key personnel, vesting upon one year anniversary, or annually in equal installments over four years, (b) 277,500 stock options granted to members of the Board of Directors, vesting upon one year anniversary, (c) 19,500 stock options granted to employees, vesting annually in equal installments over four years, and (d) 20,000 stock options granted to a consultant, vesting upon one year anniversary.

( 2) Repre sents the following options exercised:

(a) 25,000 stock options with an exercise price of $0.97 per share exercised by a board member (b) 30,000 stock options with an exercise price of $1.33 per share exercised by a board member.

(3) Represents the following options canceled:

(a) 27,500 stock options with an exercise price of $1.75 per share granted to a consultant and (b) 75,000 stock option with an exercise price of $4.10 per share granted to key personnel.

Restricted Stock Units

Restricted stock units (the “RSUs”) are granted subject to certain restrictions. Vesting conditions are determined at the discretion of the Board of Directors. The fair market value of RSUs is generally determined based on the closing market price of the stock on the grant date.

The following table summarizes the restricted stock award activity for the three months ended March 31, 2025:

						*Weighted-Average*
						*Grant Date*
		*Shares*				*Fair Value*
Outstanding at December 31, 2024			117,925			$	1.59
Granted ⁽¹⁾			230,023				1.74
Vested ⁽²⁾			(250,964	)			1.67
Outstanding at March 31, 2025			96,984			$	1.74

_________________

Notes:

(1)

On January 2, 2025, the Company granted 96,984 restricted stock units, vesting upon one year anniversary, to the Board of Directors as a result of reduction in director cash compensation of 2025, and an aggregate of 133,039 restricted stock units, vested in full, to executives and key personnel in lieu of cash bonus earned for the year ended December 31, 2024.

(2)

Represents 133,039 RSUs granted to executives and key personnel, and 117,925 RSUs granted to the Board of Directors.

Compensation Expenses

We recognize all share-based payments to employees and our Board of Directors, as non-cash compensation expense, in research and development expenses or general and administrative expenses in the consolidated statement of operations, and these charges had no impact on the Company’s reported cash flows. Stock-based compensation expense is calculated on the grant date fair values of such awards, and recognized each period based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are recorded as they occur. For the three months ended March 31, 2025, there were forfeitures of $16,880.

For performance-based awards, the Company recognizes related stock-based compensation expenses based upon its determination of the potential likelihood of achievement of the specified performance conditions at each reporting date.

Total non-cash share-based compensation expense was allocated among the following expense categories:

		*Three Months Ended March 31,*
		*2025*				*2024*
General and administrative		$	207,996			$	294,034
Research and development			17,034				12,444
Total		$	225,030			$	306,478

The following table summarizes the Company’s non-cash share-based compensation expense allocation between options and restricted stock units:

		*Three Months Ended March 31,*
		*2025*				*2024*
Share based compensation expense - stock option		$	177,294			$	190,269
Share based compensation expense - restricted stock units			47,736				116,209
Total		$	225,030			$	306,478