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Stock-Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

Note 10 – Stock-Based Compensation

 

Stock Incentive Plans

 

The Company’s board of directors adopted, and shareholders approved, the Co-Diagnostics, Inc. Amended and Restated 2015 Long Term Incentive Plan (the “Incentive Plan”) providing for the issuance of stock-based incentive awards to employees, officers, consultants, directors and independent contractors. On August 31, 2022 the shareholders approved an increase in the number of awards available for issuance under the Incentive Plan to an aggregate of 12,000,000 shares of common stock. The number of awards available for issuance under the Incentive Plan was 4,357,937 at December 31, 2023.

 

Stock Options

 

The following table summarizes option activity during the years ended December 31, 2023 and 2022:

 

   Number of Options   Weighted Average Exercise Price   Weighted Average Fair Value   Weighted Average Remaining Contractual Life (Years) 
Outstanding at December 31, 2021   1,111,363   $2.12   $1.31      
Granted   -    -    -      
Expired   -    -    -      
Forfeited/Cancelled   -    -    -      
Exercised   (70,791)   1.10    0.51      
Outstanding at December 31, 2022   1,040,572   $2.19   $1.37    5.88 
Granted   -    -    -      
Expired   -    -    -      
Forfeited/Cancelled   -    -    -      
Exercised   -    -    -      
Outstanding at December 31, 2023   1,040,572   $2.19   $1.37    4.89 
                     
Exercisable at December 31, 2023   1,040,572   $2.19   $1.37    4.89 

 

 

The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022, respectively, was $0 and approximately $0.4 million. The aggregate intrinsic value of outstanding options at December 31, 2023 and 2022 was approximately $0.2 million and $0.8 million, respectively. As of December 31, 2023, there were no unvested options and no unrecognized stock-based compensation expense related to options.

 

Restricted Stock Units

 

The grant date fair value of RSUs granted is determined using the closing market price of the Company’s common stock on the grant date with the associated compensation expense amortized over the vesting period of the awards. The following table sets forth the outstanding RSUs and related activity for the years ended December 31, 2023 and 2022:

 

   Number of RSUs  

Weighted

Average Grant Date Fair Value

 
Unvested at December 31, 2021   1,267,415   $9.94 
Granted   1,925,476    5.66 
Vested   (725,166)   8.66 
Forfeited/Cancelled   (41,000)   8.31 
Unvested at December 31, 2022   2,426,725   $6.95 
Granted   1,948,750    1.92 
Vested   (1,354,081)   6.17 
Forfeited/Cancelled   (95,897)   6.16 
Unvested at December 31, 2023   2,925,497   $3.99 

 

As of December 31, 2023, there was $9.5 million of unrecognized stock-based compensation expense related to outstanding RSUs which is expected to be recognized over a weighted-average period of 1.7 years.

 

Warrants

 

The Company has issued warrants related to financings, acquisitions and as compensation to third parties for services provided. The Company estimates the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model. The Company amortizes the fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted for services.

 

 

The following table summarizes warrant activity during the years ended December 31, 2023 and 2022:

 

   Number of Warrants  

Weighted Average Exercise

Price

   Weighted Average Fair Value   Weighted Average Remaining Contractual Life (Years) 
Outstanding at December 31, 2021   526,281   $8.15   $4.01    4.7 
Issued for adjustments to contingent purchase consideration   8,719    9.13    1.88      
Granted   -    -    -      
Expired   -    -    -      
Forfeited/Cancelled   -    -    -      
Exercised   (50,000)   2.00    1.22      
Outstanding at December 31, 2022   485,000   $8.81   $2.43    4.0 
Granted   -    -    -      
Expired   -    -    -      
Forfeited/Cancelled   -    -    -      
Exercised   -    -    -      
Outstanding at December 31, 2023   485,000   $8.81   $1.29    3.0 

 

The intrinsic value of warrants exercised during the years ended December 31, 2023 and 2022, respectively, was $0 and approximately $0.3 million. The aggregate intrinsic value of outstanding warrants at December 31, 2023 was approximately $0.

 

The total number of warrants exercisable at December 31, 2023 is 20,000. The ability to exercise the approximately 465,000 warrants issued in connection with acquisitions in prior years is contingent upon the achievement of certain development and revenue milestones on or before January 1, 2027. There was no unrecognized stock-based compensation expense related to warrants.

 

Stock-Based Compensation Expense

 

The Company recognized stock-based compensation expense as follows:

 

   2023   2022 
   Years Ended December 31, 
   2023   2022 
Cost of sales  $46,586   $63,058 
Sales and marketing   2,153,974    1,866,116 
General and administrative   4,933,822    4,050,967 
Research and development   1,202,473    1,563,082 
Total stock-based compensation expense  $8,336,855   $7,543,223