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Equity-Based Compensation
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Equity-Based Compensation

Note 8: Equity-Based Compensation

 

The 2018 Equity Incentive Plan, effective September 12, 2018, as amended and restated on August 19, 2019 (the “2018 Equity Incentive Plan”) authorizes the grant of (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards. Initially, a maximum of 7,000,000 shares of common stock were reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. When the plan was amended and restated, an additional 250,000 shares were reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan. The number of shares of the Company’s common stock available for grant and issuance under the 2018 Equity Incentive Plan is subject to an annual increase on July 1 of each calendar year, by an amount equal to two percent (2%) of the then outstanding shares of the Company’s common stock (the “2018 Plan Evergreen Provision”). As a result of the 2018 Plan Evergreen Provisions, a maximum of 12,008,069 shares of common stock is reserved for potential issuance pursuant to awards under the 2018 Equity Incentive Plan as of January 1, 2025. Unless sooner terminated, the 2018 Equity Incentive Plan will continue in effect for a period of 10 years from its effective date. There were no options issues to officers during the three months ended March 31, 2025 and the fiscal year ending December 31, 2024.

 

 

The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. During the three months ended March 31, 2025 and 2024, there were no options granted.

 

Stock options activity during the three months ended March 31, 2025, was as follows:

 

Stock option activity for employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term
(Years)		   Aggregate
Intrinsic
Value		 
Outstanding January 1, 2025   2,407,632   $2.42    8.70   $— 
Granted   —    —    —    — 
Forfeited   —    —    —    — 
Expired   —    —    —    — 
Outstanding March 31, 2025   2,407,632   $2.42    8.70   $— 
Vested and expected to vest March 31, 2025   2,407,632   $1.61    7.26   $— 
Exercisable March 31, 2025   2,407,632   $1.61    7.26   $— 

 

Stock option activity for non-employees:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term
(Years)		   Aggregate
Intrinsic
Value		 
Outstanding January 1, 2025   884,960   $1.88    9.23   $— 
Granted   —    —    —    — 
Forfeited   —    —    —    — 
Expired   —    —    —    — 
Outstanding March 31, 2025   884,960   $1.88    9.23   $— 
Vested and expected to vest March 31, 2025   884,960   $1.62    9.51   $— 
Exercisable March 31, 2025   884,960   $1.62    9.51   $— 

 

There was no unvested stock option activity for employees and non-employees.

 

Stock-based compensation expense was approximately $60,000 and $80,000 for the three months ended March 31, 2025 and 2024, resulting in a decrease in general and administrative expenses, respectively.

 

At March 31, 2025, there was no unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan. At March 31, 2024, there was approximately $214,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.