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Note 10 - Stockholders' Equity
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

NOTE 10 – STOCKHOLDERS’ EQUITY

 

Common Stock – The Company has 50,000,000 authorized shares of Common Stock, $0.001 par value. As of September 30, 2024 and December 31, 2023, there were 5,848,499 and 5,727,310 shares of Common Stock issued and outstanding, respectively.

 

Stock Issuances 

 

During the nine months ended September 30, 2024, the Company has made the following issuances of Common Stock: 

 

On January 3, 2024, the Company issued 24,500 shares of Common Stock to settle RSUs. The RSUs were valued at $73,500 for services provided by the Board of Directors in 2023. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended December 31, 2023.

 

On January 3, 2024, the Company issued 85,528 shares of Common Stock to settle RSUs. The RSUs were valued at $289,672 for services provided by management in 2023. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended December 31, 2023. In connection with the issuance, 29,998 shares of Common Stock, with a total value of $104,940, were retired to settle tax withholdings associated with stock-based compensation.

 

On June 24, 2024, the Company issued 11,932 shares of Common Stock to settle RSUs. The RSUs were valued at $36,750 for services provided by the Board of Directors from 2023 to 2024. The Company recognized the stock-based compensation of the award over the requisite service period from 2023 to 2024.

 

On September 27, 2024, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue and sell an aggregate of 3,630,129 shares of Common Stock, 1,369,871 pre-funded warrants to purchase shares of Common Stock, and warrants to purchase up to an aggregate of 5,000,000 shares of Common Stock, for gross proceeds of up to $10 million. The combined purchase price of one share of Common Stock and one accompanying warrant to purchase one share of Common Stock is $2.00. The combined purchase price of one pre-funded warrant and one accompanying warrant to purchase one share of Common Stock under the purchase agreement is $1.999.

 

The Company agreed to issue the Common Stock, warrants, and pre-funded warrants in two tranches: (i) a first tranche comprised of 29,227 shares of Common Stock, 555,302 pre-funded warrants and warrants to purchase an aggregate of 584,529 shares of Common Stock (collectively, the “First Tranche Securities”); and (ii) a second tranche comprised of 3,600,902 shares of Common Stock, 814,569 pre-funded warrants, and warrants to purchase an aggregate of 4,415,471 shares of Common Stock (the “Second Tranche Securities”).

 

On September 27, 2024, in connection with the closing of the first tranche, the Company sold and issued the First Tranche Securities for gross proceeds of approximately $1.2 million. On November 12, 2024, in connection with the closing of the second tranche, the Company sold and issued the Second Tranche Securities for gross proceeds of approximately $8.8 million.

 

Warrants 

 

On September 27, 2024 (as described above), the Company closed on a securities purchase agreement with certain purchasers, pursuant to which the Company agreed to issue and sell to such purchasers warrants for the purchase of 584,529 shares of Common Stock at an exercise price of $2.00 per common share and prefunded warrants for the purchase of 555,302 shares of Common Stock at an exercise price of $0.001 per common share.

 

The following is a summary of the periodic changes in warrants outstanding for the nine months ended September 30, 2024 and 2023:

 

  

2024

  

2023

 

Outstanding, December 31

  5,021,354   4,490,104 

Warrants issued in connection with public offering and private placement

  1,139,831   531,250 

Exercises and conversions

  -   - 

Outstanding, September 30

  6,161,185   5,021,354 

 

 

Stock-based Compensation 

 

In 2013, the Company’s Board of Directors adopted a Share Incentive Plan (the “Incentive Plan”). Under the terms and conditions of the Incentive Plan, the Board of Directors is empowered to grant stock awards, including RSUs to officers, directors, and consultants of the Company. At September 30, 2024, 52,082 RSUs were granted and outstanding under the Incentive Plan. Directors of the Company receive share compensation consisting of annual grants of $36,750 ($73,500 for the Chairman of the Board) in RSUs per annum with one-year vesting.

 

In 2022, the Company’s Board of Directors adopted an Equity Incentive Plan (the “2022 Incentive Plan”). Under the terms and conditions of the 2022 Incentive Plan, the Board of Directors is empowered to grant stock awards, including RSUs to officers and directors of the Company. At September 30, 2024, 353,471 RSUs were granted and outstanding under the 2022 Incentive Plan.

 

The Company recognizes compensation costs for RSU grants to Directors and management based on the stock price on the date of the grant.

 

The Company recognized stock-based compensation expense related to RSU grants of $166,617 and $143,195 for the three-month periods ended September 30, 2024 and 2023, respectively. For the nine months periods ended September 30, 2024, and 2023, the stock-based compensation related to share grants was $521,791 and $494,292, respectively. On September 30, 2024, the Company had $816,505 of unrecognized compensation cost related to non-vested stock grants.

 

A summary of the status of the RSUs as of September 30, 2024 and changes during the period are presented below:

 

  

September 30, 2024

 
      

Weighted

     
      

Average

  

Aggregated

 
  

Number of

  

Grant-Date

  

Intrinsic

 
  

units

  

Fair value

  

Value

 
             

Outstanding, December 31, 2023

  314,461  $3.46  $- 

Granted

  311,154   3.20   - 

Vested and settled with share issuance

  (121,960)  (3.28)  - 

Forfeited

  (98,102)  (3.54)  - 

Outstanding, September 30, 2024

  405,553  $3.30  $-