Stock-based Compensation

9 Months Ended

Sep. 30, 2023

Note 10

Stock-based Compensation:

The Company’s 2016 Omnibus Incentive Stock Plan (“2016 Plan”), as amended, has reserved up to 7,832,651 shares of common stock for future issuance. As of September 30, 2023, there were 2,160,724 shares of common stock remaining available for issuance for awards under the 2016 Plan.

The Company measures stock‑based awards at their grant‑date fair value and records compensation expense on a straight‑line basis over the requisite service period of the awards. The Company recorded stock‑based compensation expense of $318 and $455 for the three months ended September 30, 2023 and 2022, respectively, and $896 and $1,275 for the nine months ended September 30, 2023 and 2022, respectively, within general and administrative expenses in the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2023, the Company also recorded share-based compensation expense of $19 and $118, respectively, within selling and marketing expenses in the accompanying condensed consolidated statement of operations.

On April 3, 2023 and March 30, 2022, the Company granted 150,000 and 160,000 stock-based options, respectively, to the Chief Executive Officer. The vesting of these awards is contingent upon meeting one or more financial goals (a performance condition) or a common stock share price (a market condition). The fair value of stock-based awards is determined at the date of grant. Stock-based compensation expense is recorded ratably for market condition awards during the requisite service period and is not reversed, except for forfeitures, at the vesting date regardless of whether the market condition is met. The market condition was not met for the 2022 awards and 60,000 of the stock-based options were forfeited during 2022. Stock-based compensation expense for performance condition awards is re-evaluated at each reporting period based on the probability of the achievement of the goal.

Stock Options

The following table summarizes stock option activity for the nine months ended September 30, 2023:

	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2023		4,474,714		$	1.72
Granted		1,005,000		$	1.05
Exercised		—		$	—
Forfeited and expired		(425,000	)	$	1.41
Outstanding at September 30, 2023		5,054,714		$	1.61		7.1
Exercisable at September 30, 2023		3,026,220		$	1.80		6.1
Vested and expected to vest		5,054,714		$	1.61		7.1

As of September 30, 2023, the total unrecognized compensation expense related to unvested stock option awards was $1,400, which the Company expects to recognize over a weighted‑average period of approximately 2.3 years. The options outstanding and exercisable at September 30, 2023 and 2022 held no aggregate intrinsic value.

For the nine months ended September 30, 2023, the fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below:

Expected volatility	71.3	%
Risk‑free interest rate	3.6	%
Expected term (in years)	6.2
Expected dividend yield	0.0	%

Restricted Stock Units

Restricted stock units have been issued to certain board members. Restricted stock units unvested are summarized in the following table:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at January 1, 2023		119,597		$	0.93
Granted		179,613		$	1.03
Vested		(119,597	)	$	0.93
Unvested at September 30, 2023		179,613		$	1.03

As of September 30, 2023, the total unrecognized compensation expense related to unvested restricted stock units was $139, which the Company expects to recognize over a weighted‑average period of approximately 0.7 years.