StockBased Compensation

12 Months Ended

Dec. 31, 2023

StockBased Compensation

Stock-Based Compensation

Note 11 - Stock-Based Compensation

We maintain a stock-based compensation program intended to attract, retain and provide incentives for talented employees and directors and align stockholder and employee interests. During the 2023 and 2022 periods, we granted restricted stock units ("RSUs") from the 2017 Equity Compensation Plan, as amended (“2017 ECP”). RSU vesting periods are generally up to three years and/or achieving certain financial targets.

On January 1, 2022, in accordance with the plan provisions, the number of shares available for issuance under the 2017 ECP was increased by 150,000 shares. On June 16, 2022, our stockholders approved an amendment to the 2017 ECP increasing the number of shares of our common stock reserved for issuance by 15,000,000 shares. As of December 31, 2023, the total number of shares of our common stock reserved for issuance under the 2017 ECP was 24,550,000. 

Compensation Expense

We recorded stock-based compensation expense for all equity incentive plans of $1,986,296 and $2,350,314 for the years ended December 31, 2023 and 2022, respectively. Total compensation cost not yet recognized at December 31, 2023 was $1,571,436 to be recognized over a weighted-average recognition period of one year.

The following table summarizes the stock grants outstanding under our 2017 ECP plan as of December 31, 2023:

	Options Outstanding		RSUs Outstanding		Options and RSUs Exercised		Available Shares		Total
Total		—		7,010,016		6,634,121		10,905,863		24,550,000

The fair value of restricted stock units is determined using market value of the common stock on the date of the grant.  The fair value of stock options is determined using the Black-Scholes-Merton valuation model.  The use of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense and include the expected life of the option, stock price volatility, risk-free interest rate, dividend yield, exercise price, and forfeiture rate. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period.  The forfeiture rate, which is estimated at a weighted average of 0% of unvested options outstanding, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. 

The following table summarizes our stock option activity during 2023:

	Options		Weighted Average Exercise Price
Outstanding, beginning of year		100,000	$	0.52
Stock options, granted		—	$	—
Stock options exercised		—	$	—
Stock options canceled		100,000	$	0.52
Outstanding, end of year		—	$	—
Exercisable, end of year		—	$	—

Expected volatility is based on the historical volatility of our common stock over the period commensurate with or longer than the expected life of the options. The expected life of the options is based on the vesting schedule of the option in relation to the overall term of the option. The risk free interest rate is based on the market yield of the U.S. Treasury Bill with a term equal to the expected term of the option awarded. We do not anticipate paying any dividends so the dividend yield in the model is zero.

The following table summarizes the weighted average assumptions for our granted options and RSUs. There were no options granted in the period ended December 31, 2023.

The following table summarizes our restricted stock unit activity for 2023:

	Restricted Stock Unit			Weighted Average Fair Value
Outstanding, beginning of year		4,913,339		$	0.79
Granted		4,220,000		$	0.31
Vested		(2,073,322	)	$	0.86
Forfeited		(50,001	)	$	0.55
Outstanding, end of year		7,010,016		$	0.48