Stockholders’ Equity and Convertible Preferred Stock

9 Months Ended

Sep. 30, 2023

Stockholders’ Equity and Convertible Preferred Stock [Abstract]

Stockholders’ Equity and Convertible Preferred Stock

Note 12. Stockholders’ Equity and Convertible Preferred Stock

Common Stock

On March 6, 2023, the Company cancelled 644,499 shares of common stock as a result of retirement of 644,499 shares of treasury stock.

On March 20, 2023, the Company cancelled 25,000 shares of common stock owned by an executive.

June 27, 2023, pursuant to Soo Yu’s employment agreement and the Company’s 2022 Equity Incentive Plan, the Company executed a Grant Agreement, through which Soo Yu was granted 1,033,591 shares of the Company’s common stock. Upon issuance, the shares were fully vested and nonforfeitable with a total fair value of approximately $2.7 million. Pursuant to the Grant Agreement, the Company withheld 503,876 of the shares granted to satisfy Soo Yu’s tax obligation of approximately $1.3 million and recorded as income taxes withheld within the unaudited condensed consolidated balance sheet. See Restricted Stock roll-forward below.

Treasury Stock

On January 21, 2022, the Company’s board of directors authorized a share buyback program (the “Share Buyback Program”), pursuant to which the Company authorized the Share Buyback Program in an amount of up to three million dollars. During the nine months ended September 30, 2023, the Company repurchased 236,630 shares at a cost of approximately $0.9 million or $3.97 per share through marketable securities account under the Share Buyback Program. The Company records treasury stock using the cost method.

On March 6, 2023, the Company retired 644,499 shares of treasury stock with original cost of approximately $3.8 million.

Warrants

A summary of warrant activity for the nine months ended September 30, 2023, is presented below:

	Warrants		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		444,796	$	29.25		-		3.20
Outstanding as of September 30, 2023		444,796	$	29.25		-		2.45

Restricted Stock Awards

A summary of restricted stock awards activity for the nine months ended September 30, 2023, is presented below:

	Number of Restricted Stock Awards			Weighted Average Grant Day Fair Value
Nonvested at December 31, 2022		8,068		$	5.90
Granted		626,024		$	2.67
Vested		(537,783	)		2.63
Nonvested at September 30, 2023		96,309		$	3.18

Stock-based compensation associated with the amortization of restricted stock awards expense was approximately $93,000 and $1.4 million for the nine months ended September 30, 2023, and 2022, respectively. All stock compensation was recorded as a component of general and administrative expenses.

As of September 30, 2023, there is approximately $0.2 million unrecognized stock-based compensation expense related to restricted stock awards.

Stock Options

A summary of option activity under the Company’s stock option plan for the nine months ended September 30, 2023, is presented below:

	Number of Shares			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2022		31,193		$	302.97	$	-		7.9
Employee options granted		110,000			3.21		-		9.9
Employee options forfeited		(5,882	)		5.95		-		-
Employee options expired		(857	)	$	9,719.07		-		-
Outstanding as of September 30, 2023		134,454		$	10.70	$	-		9.4
Options vested and exercisable		24,454		$	44.43	$	-		7.1

Stock-based compensation associated with the amortization of stock option expense was approximately $26,000 and $40,000 for the nine months ended September 30, 2023, and 2022, respectively. All stock compensation was recorded as a component of general and administrative expenses.

Estimated future stock-based compensation expense relating to unvested stock options is approximately $0.7 million.