Note 5 - Stockholders' Equity, Options, and Warrants

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Equity [Text Block]

(5)       Stockholders’ Equity, Options, and Warrants

Employee Stock Purchase Plan

The Company has an employee stock purchase plan pursuant to which employees of the Company may participate to purchase shares of common stock at a discount. During the six months ended June 30, 2024 and 2023, the Company issued 143,098 and 191,390 shares of common stock, respectively, to employees under the employee stock purchase plan for proceeds of $4,865 and $4,880, respectively. As of  June 30, 2024, 2,081,446 shares of common stock remain available for issuance under the employee stock purchase plan.

Stock-Based Compensation Plans

2015 Incentive Plan - In April 2015, the Company’s Board of Directors approved the International Isotopes Inc. 2015 Incentive Plan (as amended, the 2015 Plan), which was subsequently approved by the Company’s shareholders in July 2015. The 2015 Plan was amended and restated in July 2018 to increase the number of shares authorized for issuance under the 2015 Plan by an additional 20,000,000 shares. The 2015 Plan provides for the grant of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units, and other stock or cash-based awards. At June 30, 2024, there were 17,217,546 shares available for issuance under the 2015 Plan.

Employee/Director Grants - The Company accounts for issuances of stock-based compensation to employees by recognizing, as compensation expense, the cost of employee services received in exchange for equity awards. The compensation expense is based on the grant date fair value of the award. Stock option compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award (the vesting period).

Non-Employee Grants - The Company accounts for its issuances of stock-based compensation to non-employees by recognizing compensation expense based on the grant date fair value of the award. Stock option compensation expense is recognized over the vesting period for the award.

Option awards outstanding as of  June 30, 2024, and changes during the six months ended June 30, 2024, were as follows:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
Fixed Options	Shares		Exercise Price		Contractual Life		Intrinsic Value
Outstanding at December 31, 2023		24,787,500	$	0.05		5.4	$	17,000
Granted		3,075,000		0.04
Exercised		—		—
Expired		—		—
Forfeited		—		—
Outstanding at June 30, 2024		27,862,500		0.04		5.5	$	—
Exercisable at June 30, 2024		20,222,500	$	0.05		4.3	$	—

The intrinsic value of outstanding and exercisable shares is based on the closing price of the Company’s common stock on the OTCQB of $0.03 per share on June 30, 2024, the last trading day of the three months ended  June 30, 2024.

As of  June 30, 2024, there was $112,003 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of 1.80 years.

Total stock-based compensation expense for the six months ended June 30, 2024 and 2023 was $84,400 and $224,846, respectively.

During the six months ended June 30, 2024, the Company granted an aggregate of 2,050,000 qualified stock options to 3 of its employees. These options vest over a three-year or five-year period with the first vesting on the first anniversary of the date of grant and expiration at ten-year anniversary for all grants. The exercise price for these granted options was $0.04 per share. The options issued during the six months ended June 30, 2024 have a fair value of $57,275, as estimated on the date of issue using the Black-Scholes options pricing model with the following weighted-average assumptions: risk free interest rate of 4.56% to 4.66%, expected dividend yield rate of 0%, expected volatility of 72.94% to 78.11% and an expected life between 5 and 7 years.

Restricted Stock Units outstanding as of  June 30, 2024, and changes during the six months ended June 30, 2024, were as follows:

Non-Vested Restricted Stock Units	Number of restricted stock units			Weighted average grant-date fair value
Outstanding at December 31, 2023		7,000,000		$	0.04
Granted		—
Vested and Exercised		(1,750,000	)		0.04
Forfeited / Cancelled		—
Outstanding at June 30, 2024		5,250,000		$	0.04

As of  June 30, 2024, there was $107,037 of unrecognized compensation expense related to Restricted Stock Units that will be recognized over a weighted-average period of 1.46 years.

Preferred Stock

At June 30, 2024, there were 4,063 shares of the Series C Preferred Stock outstanding with a mandatory redemption date of February 2025 at $1,000 per share in either cash or shares of common stock, at the option of the holder. Holders of the Series C Preferred Stock do not have any voting rights except as required by law and in connection with certain events as set forth in the Statement of Designation of the Series C Preferred Stock. The Series C Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on February 17th of each year. The Series C Preferred Stock are convertible at the option of the holders at any time into shares of the Company common stock at an initial conversion price equal to $0.10 per share, subject to adjustment. If the volume-weighted average closing price of the Company’s common stock over a period of 90 consecutive trading days is greater than $0.25 per share, the Company may redeem all or any portion of the outstanding Series C Preferred Stock at the original purchase price per share plus any accrued and unpaid dividends, payable in shares of common stock.

During the six months ended June 30, 2024 and 2023, dividends paid to holders of the Series C Preferred Stock totaled $243,030 and $243,780 respectively. Some holders of the Series C Preferred Stock elected to settle their dividend payments with shares of the Company’s common stock in lieu of cash. For the six months ended June 30, 2024 and 2023, the Company issued an aggregate of 1,808,400 and 2,266,500 shares of common stock, respectively, in lieu of dividend payments in the aggregate of $90,420 and $90,660, respectively, with the remaining dividend payable settled in cash of $152,610 and $153,120, respectively.