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Stock-Based Compensation

3 Months Ended

Jun. 30, 2023

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

NOTE 5 – STOCK-BASED COMPENSATION

Amended 2017 Equity Incentive Plan

In October 2017, the Board approved the 2017 Equity Incentive Plan (the Plan), as amended, with 1,000,000 shares of common stock reserved for issuance. In January 2020 and August 2021, the Board approved an increase in the number of shares reserved for issuance by 333,334 and 1,333,334 shares, respectively. In January 2023, the Company’s stockholders approved an increase in the number of shares reserved for issuance under the plan by an additional 2,000,000 shares. Under the Plan, eligible employees, directors and consultants may be granted a broad range of awards, including stock options, stock appreciation rights, restricted stock, performance-based awards and restricted stock units. The Plan is administered by the Board or, in the alternative, a committee designated by the Board.

Stock-Based Compensation Expense

The expense relating to stock options is recognized on a straight-line basis over the requisite service period, usually the vesting period, based on the grant date fair value. As of June 30, 2023, the unamortized compensation cost was approximately $3,084,000 related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 1.90 years.

During the three months ended June 30, 2023, the Company granted 6,375 shares to members of the Board in accordance with the OD Plan and recorded approximately $6,000 of stock-based compensation expense for these grants. During the three months ended June 30, 2023, the Company granted options with 10-year terms to purchase 373,375 shares of its common stock to employees, directors and consultants.

The weighted-average grant date fair value of options granted was $1.00 and $4.26 per share for the three months ended June 30, 2023 and 2022, respectively. The following assumptions were used in the fair-value method calculations:

			Three Months Ended, June 30,
			2023				2022
Risk-free interest rates			3.51 %-4.13	%			2.82% - 3.25	%
Volatility			83% -152	%			159% - 223	%
Expected life (years)			5.0 - 6.1				5.0 - 6.0

The fair values of options at the grant date were estimated utilizing the Black-Scholes valuation model, which includes simplified methods to establish the fair term of options, as well as average volatility. The risk-free interest rate was derived from the Daily Treasury Yield Curve Rates, as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of the options. A dividend yield of zero was applied because the Company has never paid dividends and has no intention to pay dividends in the foreseeable future. The Company accounts for forfeitures as they occur.

A summary of stock option activity under the Plan is presented below:

						Options Outstanding
										Weighted
		Shares								Average
		Available				Number of				Exercise
		for Grant				Shares				Prices
Balance at March 31, 2023			2,132,292				2,481,090			$	5.19
Options granted			(373,375	)			373,375				1.27
Share awards			(6,375	)			—				—
Options cancelled and returned to the Plan			30,272				(30,272	)			4.29
Balance at June 30, 2023			1,782,814				2,824,193			$	4.67

There were no stock options exercised during the three months ended June 30, 2023 and 2022.

The following table summarizes the range of outstanding and exercisable options as of June 30, 2023:

		Options Outstanding												Options Exercisable
Range of Exercise Price		Number Outstanding				Weighted Average Remaining Contractual Life (in Years)				Weighted Average Exercise Price				Number Exercisable				Weighted Average Exercise Price				Aggregate Intrinsic value
$0.93 - $2.00			1,285,475				8.14			$	1.75				540,308			$	1.86				—
$3.95 - $7.51			1,017,087				7.85			$	5.39				677,372			$	5.97				—
$8.61 - $17.70			521,631				7.99			$	10.53				411,005			$	11.21				—
$0.93 - $17.70			2,824,193				8.01			$	4.67				1,628,685			$	5.78				—

The intrinsic value per share is calculated as the excess of the closing price of the common stock on the Company’s principal trading market over the exercise price of the option.