STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS

NOTE 6 – STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS

During 2013, the Company adopted the 2013 Omnibus Equity Compensation Plan (the “2013 Plan”). Under the 2013 Plan, the Company is authorized to grant awards of stock options, restricted stock, restricted stock units and other stock-based awards up to an aggregate of 400,000 shares of common stock.  The 2013 Plan is intended to permit certain stock options granted to employees under the 2013 Plan to qualify as incentive stock options.  All options granted under the 2013 Plan, which are not intended to qualify as incentive stock options are deemed to be non-qualified stock options.  

On November 14, 2017, the Executive Committee of the Company’s Board of Directors adopted the 2017 Equity Incentive Plan (the “2017 Plan”) which covered the potential issuance of 260,000 shares of common stock. The 2017 Plan provided that directors, officers, employees, and consultants of the Company were eligible to receive equity incentives under the 2017 Plan at the discretion of the Board or the Board’s Compensation Committee.

On August 10, 2020, the Company’s Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”), subject to stockholder approval, which authorizes the potential issuance of up to 1,069,110 shares of common stock. On September 30, 2020, the Company’s stockholders approved the 2020 Plan, and upon such approval the 2020 Plan became effective and the 2017 Plan was terminated. Shares of common stock underlying existing awards under the 2017 Plan may become available for issuance pursuant to the terms of the 2020 Plan under certain circumstances. Employees and non-employee directors of the Company or its affiliates, and other individuals who perform services for the Company or any of its affiliates, are eligible to receive awards under the 2020 Plan at the discretion of the Board of Directors or the Board’s Compensation Committee.

On March 28, 2022, the Company’s Board of Directors adopted the First Amendment to the 2020 Plan, subject to stockholder approval, which increased the shares authorized for potential issuance under the 2020 Plan to 2,069,100 shares of common stock and extended the term of the 2020 Plan to June 9, 2032. On June 9, 2022, the Company’s stockholders approved the First Amendment to the 2020 Plan. On April 17, 2023, the Company’s Board of Directors adopted the Second Amendment to the 2020 Plan, subject to stockholder approval, which increased the shares authorized for potential issuance under the 2020 Plan to 3,069,100 shares of common stock and extended the term of the 2020 Plan to June 6, 2033. On June 6, 2023, the Company’s stockholders approved the Second Amendment to the 2020 Plan. On March 18, 2024, the Company’s Board of Directors adopted the Third Amendment to the 2020 Plan, subject to stockholder approval, which increased the shares authorized for potential issuance under the 2020 Plan to 4,069,100 shares of common stock and extended the term of the 2020 Plan to June 4, 2034. On June 4, 2024, the Company’s stockholders approved the Third Amendment to the 2020 Plan.

The 2020 Plan, as amended, is administered by the Compensation Committee which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan.

In connection with incentive stock options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). The aggregate fair market value (determined at the time of the grant) of stock with respect to which incentive stock options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its affiliates) shall not exceed $100 thousand, and the options in excess of $100 thousand shall be deemed to be non-qualified stock options, including prices, duration, transferability and limitations on exercise. The maximum number of shares of common stock that may be issued under the 2020 Plan pursuant to incentive stock options may not exceed, in the aggregate, 1,000,000.

The Company has issued non-qualified stock options pursuant to contractual agreements with non-employees. Options granted under the agreements are expensed when the related service or product is provided. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value represent management’s best estimates and involve inherent uncertainties and judgements.

Stock Options

The following table summarizes the activities for the Company’s stock options as of September 30, 2024:

	Options Outstanding
						Weighted -
						Average
						Remaining		Aggregate
				Weighted-		Contractual		Intrinsic
	Number of			Average		Term		Value
	Shares			Exercise Price		(in years)		(in thousands)(1)
Balance as of December 31, 2023		301,471		$	4.56
Granted		-			-
Forfeited/Cancelled/Expired		(80,471	)	$	7.27
Balance as of September 30, 2024		221,000		$	3.57
Exercisable as of September 30, 2024		221,000		$	3.57		0.7	$	-

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. 

As of September 30, 2024, the Company had no unvested stock options.

During the nine months ended September 30, 2024, and 2023, the Company expensed $0 thousand, with respect to options.

As of September 30, 2024, there was $0 unrecognized compensation cost related to outstanding stock options.

Restricted Stock Awards and Restricted Stock Units

The following table summarizes the unvested restricted stock awards as of September 30, 2024:

				Weighted -
				Average
	Number of			Grant
	Award Shares			Date Fair Value
Unvested at December 31, 2023		416,669			1.44
Granted		140,000			1.60
Vested		(416,669	)		1.44
Balance at September 30, 2024		140,000		$	1.60

As of September 30, 2024, total unrecognized share-based compensation cost related to unvested restricted stock awards is $152 thousand, which is expected to be recognized over a weighted-average period of less than one year.

The following table summarizes the unvested time-based restricted stock units as of September 30, 2024: 

				Weighted -
				Average
	Number of			Grant
	Unit Shares			Date Fair Value
Unvested at December 31, 2023		371,253			1.32
Granted		88,011			1.46
Vested		(70,527	)		1.33
Forfeited		(25,334	)		1.23
Balance at September 30, 2024		363,403		$	1.35

As of September 30, 2024, total unrecognized share-based compensation cost related to unvested time-based restricted stock units was $198 thousand, which is expected to be recognized over a weighted-average period of less than one year.

The following table summarizes the unvested performance based restricted stock units as of September 30, 2024:

				Weighted -
				Average
	Number of			Number of
	Unit Shares			Unit Shares
Unvested at December 31, 2023		1,438,760			1.51
Granted		555,000			1.08
Forfeited/Cancelled		(192,100	)		1.78
Balance at September 30, 2024		1,801,660		$	1.35

For restricted stock units with stock price appreciation targets, we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the restricted stock unit’s contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value of each grant was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the derived service period and there is no ongoing adjustment or reversal based on actual achievement during the period.

As of September 30, 2024, total unrecognized share-based compensation cost related to unvested performance based restricted stock units was $960 thousand, which is expected to be recognized over a weighted-average period of 1.2 years.

Warrants

The following table summarizes the activities for the Company’s warrants as of September 30, 2024:

	Number of Warrant Shares		Weighted- Average Exercise Price		Weighted - Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)(1)
Balance as of December 31, 2023		4,628,586	$	4.13
Granted		-		-
Expired		-		-
Balance as of September 30, 2024		4,628,586	$	4.13		1.5
Exercisable as of September 30, 2024		4,628,586	$	4.13		1.5	$	-

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $1.43 for our common stock on September 30, 2024.