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SHAREHOLDERS’ EQUITY
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
SHAREHOLDERS’ EQUITY

11. SHAREHOLDERS’ EQUITY

 

Common Stock

 

At December 31, 2021, the Company had 4,676,301 shares of common stock outstanding. On February 17, 2021, the Company sold 1,131,600 shares of common stock for net proceeds of $5.3 million.

 

Warrants

 

In December 2016, the Company completed a registered direct offering of 100,000 shares of common stock at a net gross price of $15.00 per share. Concurrently, the investors received warrants to purchase 100,000 shares of common stock of the Company at an exercise price of $20.05 per share, for a period of five years from the final closing date of June 21, 2017. The warrants include anti-dilution rights. The total net proceeds received by the Company were approximately $1.3 million. The fair value of the warrants upon issuance were $1.2 million, with the remaining $0.1 million being attributed to common stock. On September 29, 2020, the Company received proceeds of $565 thousand related to the exercise of warrants to purchase 50,000 shares of common stock. The warrants have been classified as liabilities due to features in the warrant agreement that give the warrant holder an option to require the Company to redeem the warrant at a calculated fair value in the event of a “Fundamental Transaction,” as defined in the warrant agreement. The fair value of the remaining warrants to purchase 50,000 shares of common stock was $19 thousand and $95 thousand at December 31, 2021 and 2020, respectively.

 

Pursuant to the original warrant agreement, as a result of common stock issuances at various prices, the warrant exercise price has been reduced from its original $20.50 exercise price to the floor price of $3.92, which is the exercise price of the warrants at December 31, 2021.

 

Stock Option Plans

 

From time to time, the Company may grant stock options under its incentive plan covering shares of common stock to employees of the Company. Stock options, when exercised, are settled through the payment of the exercise price in exchange for new shares of stock underlying the option. These awards typically expire ten years from the grant date.

 

For the years ended December 31, 2021 and 2020, there was no compensation expense related to stock options. As of December 31, 2021, all stock options had vested. No stock options were granted or exercised, during the years ended December 31, 2021 or 2020. During the years ended December 31, 2021 and 2020, options to purchase 332 shares and 166 shares, respectively, expired. Presented below is information about stock options outstanding and exercisable as of December 31, 2021 and 2020:

   December 31, 2021   December 31, 2020 
   Shares   Price (1)   Shares   Price (1) 
                 
Stock options outstanding and exercisable   31,035   $62.79    31,367   $64.78 

 

  (1) Represents the weighted average price.

 

 

The following table summarizes information for stock options outstanding and for stock options exercisable at December 31, 2021. All shares and prices per share have been adjusted for a one share-for-ten shares reverse stock split that took effect on January 6, 2020:

 SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE

Options Outstanding   Options Exercisable 
    Exercise Price   Remaining       Weighted Average 
Number of   Range   Weighted   Contractual   Number of   Exercise 
Shares   Low   High   Average   Term (years)   Shares   Price 
                          
 16,500   $7.20   $11.60   $10.00    5.8    16,500   $10.00 
 10,622    90.00    124.80    106.20    2.3    10,622    106.20 
 2,913    139.20    171.00    147.39    0.4    2,913    147.39 
 1,000    226.20    226.20    226.20    2.7    1,000    226.20 
                                 
 31,035   $7.20   $226.20   $62.79    4.0    31,035   $62.79 

 

Restricted Stock

 

The Company grants restricted stock under its incentive plan covering shares of common stock to employees and directors of the Company. The restricted stock awards are time-based awards and are amortized ratably over the requisite service period. Restricted stock vests ratably on each anniversary following the grant date provided the grantee is employed on the vesting date. Restricted stock granted to employees, when vested, are net settled through the issuance of shares, net of the number of shares required to pay withholding taxes.

 

The following table presents the changes in non-vested, time-based restricted stock awards to all employees and directors for the year ended December 31, 2021:

 SCHEDULE OF NON-VESTED TIME-BASED RESTRICTED STOCK AWARDS

   Shares  

Weighted-Avg.

Grant Date

Fair Value

per Share

 
     
Non-vested restricted stock at December 31, 2020   71,000   $4.89 
Granted   150,000   $4.72 
Vested   (47,000)  $4.89 
Non-vested restricted stock at December 31, 2021   174,000   $4.75 

 

The following table presents the stock compensation expense related to restricted stock grants for the years ended December 31, 2021 and 2020:

 SCHEDULE OF STOCK COMPENSATION EXPENSE RELATED TO RESTRICTED STOCK GRANTS

  

Year Ended

December 31,

 
   2021   2020 
   (in thousands) 
Stock compensation expense  $549    211 

 

Total compensation cost related to non-vested time-based awards not yet recognized in the Company’s condensed consolidated statements of operations as of December 31, 2021 is $296 thousand. This cost is expected to be recognized over a weighted average period of 2.5 years. At December 31, 2021, the Company had 1,000,000 shares available for issuance under its 2021 Sock Incentive Plan.