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Stock-Based Compensation
3 Months Ended
Mar. 31, 2024
Stock-Based Compensation [Abstract]  
Stock-based Compensation

Note 12. Stock-based Compensation

 

Incentive Plans

 

The Company’s 2019 Equity and Incentive Plan, as amended in 2021 (the “2019 Plan”) enabled the Company to grant incentive stock options or nonqualified stock options and other equity awards to employees, directors and consultants of the Company up to a total of 3 million shares of the Company’s common stock. All 3 million shares available for issue under the 2019 Plan have been issued.

 

On July 5, 2022, the Board of Directors adopted the Company’s 2022 Equity and Incentive Plan (the “2022 Plan”) which provides for the issuance of up to 16 million shares of the Company’s common stock. The 2022 Plan was approved by a majority of the shareholders in September 2022. Per the 2022 Plan, the 2022 Plan reserves increased automatically by 1 million shares on January 1, 2023 and January 1, 2024, providing for a total issuance of up to 18 million shares of the Company’s common stock. As of March 31, 2024, a total of 13,027,563 shares and options were issued and outstanding under the 2022 Plan.

 

Options

 

The following table summarizes the Company’s option activity for the three months ended March 31, 2024:

 

   Number
Outstanding
   Weighted
Average
Exercise
Price per
Share
   Weighted
Average
Remaining
Contractual
Life (Years)
 
Balance as of January 1, 2024   13,843,499   $2.64    3.7 
Granted   
-
    
-
    
-
 
Exercised   
-
    
-
    
-
 
Forfeited   (815,937)   2.40    
-
 
Balance as of March 31, 2024   13,027,562   $2.66    3.5 
Vested and exercisable as of March 31, 2024   8,428,994   $3.27    3.2 

 

The Company did not grant any options during the three months ended March 31, 2024. The following table presents the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted during the three months ended March 31, 2023:

 

   Three Months Ended 
   March 31, 
   2023 
Exercise price  $1.84 – 1.84 
Risk-free interest rate   4.7 – 4.7%
Expected volatility   122.2 – 136.9%
Expected dividend yield   -%
Expected life of options (in years)   5.0 

 

The following table summarizes the exercise price range as of March 31, 2024 (in thousands, except exercise price data):

 

Exercise Price   Outstanding Options   Exercisable Options 
$0.00 – 1.00    180    10 
$1.00 – 2.00    5,448    1,791 
$2.00 – 3.00    5,880    5,127 
$3.00 – 6.00    38    29 
$6.00 – 7.00    665    660 
$7.00 – 12.00    818    812 
      13,028    8,429 

 

The weighted average grant-date fair value of stock options granted during the three months ended March 31, 2023 was $1.38 per share. There is no comparable figure for the three months ended March 31, 2024, as the Company did not grant any stock options granted during the period. As of March 31, 2024, total unrecognized compensation cost related to common stock options was $4.6 million, which is expected to be recognized over a period of 3.8 years.

 

Stock-based Compensation

 

The Company recognized stock-based compensation expense related to common stock options and restricted shares of common stock in the following expense categories of its consolidated statements of operations (in thousands):

 

   Three  Months Ended 
   March 31, 2024   March 31, 2023 
Research and development  $694   $362 
Selling and marketing   68    (192)
General and administrative   464    522 
Total stock-based compensation  $1,226   $692 

 

For the three months ended March 31, 2024 and 2023, the statement of stockholders’ equity was lower by $14 thousand and lower by $49 thousand, respectively, as compared to the statement of cash flows for timing differences between award dates and the realization of stock-based compensation expense. The expense for the three months ended March 31, 2024 is primarily attributable to vesting expense recognition, offset by insignificant pre-vesting forfeitures of common stock options for separated employees.

 

In terms of new issuances, the Company issued 218 thousand shares of common stock to former executives in the three months ended March 31, 2024 per their respective employment and separation agreements (the “Separation Agreement Shares”). The Company did not issue any stock grants during the three months ended March 31, 2024. In conjunction with The Separation Agreement Shares, the Company recognized $197 thousand of stock-based compensation expense during the three months ended March 31, 2024, and does not expect future expense related to these offerings as they are fully vested. 

 

Stock-based Compensation for Services

 

The Company recognized stock-based compensation expense for services in lieu of cash payments to certain consultants, including expenses for both shares issued and stock option awards granted, in the following expense categories of its consolidated statements of operations (in thousands):

 

   Three  Months Ended 
   March 31, 2024   March 31, 2023 
General and administrative  $     59   $154 
Total stock-based compensation for services  $59   $154 

 

The difference in stock-based compensation for services on the statement of stockholders’ equity as compared to the statement of cash flows for the years ended March 31, 2024 and 2023 of $55 thousand and $2.2 million, was driven by timing differences between award dates and the realization of stock-based compensation expense.

 

In terms of new issuances, the Company issued 73 thousand and 1.5 million shares of common stock for services in the three months ended March 31, 2024 and 2023, respectively.