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Stockholders' Equity
 3 Months Ended
Mar. 31, 2024
Stockholders' Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

 

Common Stock

 

During the quarter ended March 31, 2024, there was no movement in common stock.

 

Common Stock Warrants

 

The Company’s outstanding stock warrants have not changed during the three months ended March 31, 2024. The outstanding stock warrants as of March 31, 2024 are 4,904,016 with a weighted average remaining contractual life (in years) of 3.40 and a weighted average exercise price of $11.07, all of which are exercisable.

 

Stock-Based Compensation:

 

Equity plans

  

Under the 2018 Equity Plan, the number of shares issuable under the Plan on the first day of each fiscal year increase by an amount equal to the lower of (i) 100,000 shares (after a later 10 for 1 stock split) or (ii) 5% of the outstanding shares on the last day of the immediately preceding fiscal year.  At the Company’s annual meeting on May 17, 2023, the stockholders approved an amendment to the 2021 Equity Plan that, amongst other things, increased the number of the shares available under the 2021 Equity Plan to 10,000,000 shares, and the shares available under the 2021 Equity Plan increased by 1,000,000 shares on January 1, 2024 to 11,000,000. Upon review of the previously granted shares in previous years and the availability of shares, on April 9, 2024, the Board of Directors approved the 2024 Omnibus Equity Plan which will provide an initial 10,000,000 shares of common stock available for grant per the terms of the 2024 Plan and provides alignment with long-term stockholder value creation. The 2024 Omnibus Equity Plan as approved by the Board of Directors has subsequently been presented to the stockholders for adoption and approval at the Company’s annual general meeting to be held on June 12, 2024.

 

The Company recognized stock-based compensation expense during the three months ended March 31, 2024 and 2023, as follows: 

 

   Three months ended
March,		 
   2024   2023 
Performance-based restricted stock awards  $55,983   $166,779 
Service-based restricted stock awards   6,180,528    29,995 
Stock issued to consultants   -    371,014 
Warrant expense   -    500,500 
Option expense*   (1,335,027)   
-
 
Total stock-based compensation**  $4,901,484   $1,068,288 

 

*The option expense contains a reversal of stock-based compensation expenses from 2023 for cancelled option awards.

 

**Stock based compensation expense in the consolidated, condensed unaudited statement of operations includes $3.97 million of stock based compensation and $0.93 million for surrendered shares.

 

Performance-based awards

 

Performance-based awards generally vest over a three-year performance period upon the successful completion of specified market and performance conditions.

 

The Company’s outstanding performance-based restricted stock awards have not changed during the three months ending March 31, 2024. The outstanding performance-based restricted stock awards as of March 31, 2024 are 75,545, with a weighted average remaining contractual life (in years) of 8.33. Of these awards 44,327 are exercisable as of March 31, 2024 and have a weighted average remaining contractual life (in years) of 4.45.

 

As of March 31, 2024, there was approximately $0.06 million of unrecognized compensation cost related to the performance-based awards, which is expected to be recognized over a remaining weighted-average vesting period of approximately four months.

 

Service-based restricted stock awards

 

Service-based awards generally vest over a specified time period and as determined by the Compensation Committee of the Board of Directors and/or as specified in the award agreements or employment agreements.

 

The following table presents a summary of the Company’s service-based awards activity:

 

   Number of
shares		   Weighted
Average
Remaining
Contractual
Life
(in years)		 
Outstanding as of December 31, 2023   5,242,393    2.28 
Issued   3,505,383    - 
Outstanding as of March 31, 2024   8,747,776    1.43 
Exercisable as of March 31, 2024   1,499,030    0.02 

 

As of March 31, 2024, there was approximately $2.88 million of unrecognized compensation cost related to the service-based restricted stock awards, which is expected to be recognized over a remaining weighted-average vesting period of approximately eleven months.

 

Stock options awards

 

Stock options awards vest upon the successful completion of specified stock price threshold conditions.

 

The following table presents a summary of the Company’s Stock options awards activity:

 

   Number of
shares		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Life
(in years)		   Aggregate
Intrinsic
Value		 
Outstanding as of December 31, 2023   3,500,417   $1.23    9.70   $6,923,000 
Cancelled   (1,750,000)   0.94    -    - 
Outstanding as of March 31, 2024   1,750,417   $0.56    9.65   $1,708,000 
Exercisable as of March 31, 2024   417   $0.01    -   $- 

 

As of March 31, 2024, there was approximately $0.54 million of unrecognized compensation cost related to the stock options awards, which is expected to be recognized over a remaining weighted-average vesting period of approximately eight months.