Note 6 - Equity and Stock-based Compensation

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note 6 – Equity and Stock-Based Compensation

Under the Second Amended and Restated Certificate of Incorporation, the Company has the authority to issue a total of 101,000,000 shares of capital stock, consisting of 100,000,000 shares of common stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, which will have such rights, powers and preferences as the Board of Directors shall determine.

Stock-Based Compensation

In July 2016, the Board of Directors approved the Company’s 2016 Omnibus Incentive Plan (the “2016 Omnibus Plan”), and on August 4, 2016, the Board amended such plan to include an evergreen provision, intended to increase the maximum number of shares issuable under the Omnibus Plan on the first day of each fiscal year (starting on January 1, 2017) by an amount equal to six percent (6%) of the shares reserved as of the last day of the preceding fiscal year, provided that the aggregate number of all such increases may not exceed 1,000,000 shares. As of November 21, 2016, holders of a majority of our capital stock executed a written consent adopting and approving the 2016 Omnibus Plan, as amended and restated, which provides for the Company to grant equity and cash incentive awards to officers, directors and employees of, and consultants to, the Company and its subsidiaries. Further, on March 4, 2022, the Board approved an amendment to the 2016 Omnibus Plan to increase the shares available under to Plan to 4,250,000 and remove the annual evergreen provision. Effective as of April 21, 2022, holders of a majority of our common stock outstanding executed a written consent approving the March 2022 amendment to the 2016 Omnibus Plan which is expected to become effective on or around June 6, 2022. 

A summary of stock option activity under the 2016 Omnibus Plan during the three months ended March 31, 2022 is presented below: 

Stock Options – 2016 Omnibus Plan	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at January 1, 2022		1,355,001	$	0.52		3.90
Granted	1,181,666		$	0.69		10.00
Exercised		-	$	-		-
Forfeited or expired		-	$	-		-
Outstanding at March 31, 2022		2,536,667	$	0.60		6.58
Exercisable at March 31, 2022		2,103,334	$	0.57	5.89

There were 1,181,666 stock options granted under the 2016 Omnibus Plan during the three months ended March 31, 2022 of which (i) 206,666 options were granted to settle prior accrued compensation liabilities with senior management and Board of Directors, (ii) 450,000 of immediately vested options were granted to management, the Board of Directors, and a third-party service provider, and (iii) 525,000 incentive stock options vesting over 3 years were granted to employees. The fair value of the stock options granted in settlement of accrued liabilities was approximately $3,000. As the options issued were to related parties, the $103,333 of settled liabilities was credited to additional paid-in-capital. No stock options were exercised during the three months ended March 31, 2022. As of March 31, 2022, there was approximately $6,200 of unrecognized compensation cost related to the 525,000 non-vested stock options granted during the quarter.

For the three months ended March 31, 2022, the Company recorded stock-based compensation expense of $6,430. There was no stock based compensation expense for the three months ended March 31, 2021.