Stock Based Awards

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock Based Awards

6. Stock Based Awards

Equity Incentive Plans

The Company adopted an equity incentive plan in 2015 (the “2015 Plan”) under which 833,333 shares of common stock have been reserved for issuance to employees, and non-employee directors and consultants of the Company. Recipients of incentive stock options granted under the 2015 Plan shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2015 Plan is ten years. As of September 30, 2024, 22,000 shares remain available for future grants under the 2015 Plan.

Common Stock Reserved for Future Issuance

The following table presents information concerning common stock available for future issuance (in thousands) as of September 30, 2024:

	Shares Available for Grant
Balance at December 31, 2023		275
Restricted Stock Units (RSU) Granted		(256	)
Cancelled or returned		3
Balance at September 30, 2024		22

Stock Options

The following table summarizes stock option transactions for the 2015 Plan, collectively, for the nine months ended September 30, 2024 (in thousands, except per share amounts):

	Total Options Outstanding			Weighted Average Exercise Price		Aggregate Intrinsic Value
Balance at December 31, 2023		558		$	10.37	$	-
Exercised		-			-		-
Granted		-			-		-
Cancelled		(3	)		-		-
Balance at September 30, 2024		555		$	10.40	$	-

Restricted Stock Units

On August 12, 2024, the Company’s Compensation Committee approved the issuance of 256,000 restricted stock unit (“RSU”) awards to non-employee directors, officers, consultants and employees. The aggregate fair value of the restricted stock unit awards granted was estimated to be $451,000 using the market price of the stock on the date of the grant which is expensed using the straight-line method over the vesting period.

	Total Options Outstanding		Weighted Average Fair Value		Aggregate Intrinsic Value
Unvested December 31, 2023		-	$	-	$	-
Granted		256		-		-
Forfeited		-		-		-
Vested		92		1.76		-
Unvested and expected to vest at September 30, 2024		164	$	1.76	$	-

The Company accounts for share-based awards to employees and nonemployee directors and consultants in accordance with the provisions of ASC 718, Compensation—Stock Compensation., and under the recently issued guidance following FASB’s pronouncement, ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC 718, and applicable updates adopted, share-based awards are valued at fair value on the date of grant and that fair value is recognized over the requisite service, or vesting, period. The Company values its equity awards using the Black-Scholes option pricing model, and accounts for forfeitures when they occur. For the three and nine months ended September 30, 2024 and 2023, equity-based compensation expense recorded on vested options and RSU was $252,000 and $557,000 and $173,000 and $643,000 respectively.

As of September 30, 2024, there was approximately $321,000 of total unrecognized compensation expense related to non-vested stock options that is expected to be recognized over a weighted average period of 0.8 years. For options granted and outstanding, there were 555,000 options outstanding which were fully vested or expected to vest, with an aggregate intrinsic value of $0.00, a weighted average exercise price of $10.40 and weighted average remaining contractual term of 7.47 years at September 30, 2024. For vested and exercisable options, outstanding shares totaled 435,000, with an aggregate intrinsic value of $0.00. These options had a weighted average exercise price of $12,38 per share and a weighted-average remaining contractual term of 7.16 years at September 30, 2024.

The aggregate intrinsic value of outstanding and exercisable options at September 30, 2024 was calculated based on the closing price of the Company’s common stock as reported on The Nasdaq Capital Market on September 30, 2024 of $1.76 per share less the exercise price of the options. The aggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying options.