STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS

NOTE 10– STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS

During 2013, the Company adopted the 2013 Omnibus Equity Compensation Plan (the “2013 Plan”). Under the 2013 Plan, the Company is authorized to grant awards of stock options, restricted stock, restricted stock units and other stock-based awards up to an aggregate of 400,000 shares of common stock.  The 2013 Plan is intended to permit certain stock options granted to employees under the 2013 Plan to qualify as incentive stock options.  All options granted under the 2013 Plan, which are not intended to qualify as incentive stock options are deemed to be non-qualified stock options.  

On November 14, 2017, the Executive Committee of the Company’s Board of Directors adopted the 2017 Equity Incentive Plan (the “2017 Plan”) which covered the potential issuance of 260,000 shares of common stock. The 2017 Plan provided that directors, officers, employees, and consultants of the Company were eligible to receive equity incentives under the 2017 Plan at the discretion of the Board or the Board’s Compensation Committee.

On August 10, 2020, the Company’s Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”), subject to stockholder approval, which authorizes the potential issuance of up to 1,069,110 shares of common stock. On September 30, 2020, the Company’s stockholders approved the 2020 Plan, and upon such approval the 2020 Plan became effective and the 2017 Plan was terminated. Shares of common stock underlying existing awards under the 2017 Plan may become available for issuance pursuant to the terms of the 2020 Plan under certain circumstances. Employees and non-employee directors of the Company or its affiliates, and other individuals who perform services for the Company or any of its affiliates, are eligible to receive awards under the 2020 Plan at the discretion of the Board of Directors or the Board’s Compensation Committee.

On March 28, 2022, the Company’s Board of Directors adopted the First Amendment to the 2020 Plan, subject to stockholder approval, which increased the shares authorized for potential issuance under the 2020 Plan to 2,069,100 shares of common stock and extended the term of the 2020 Plan to June 9, 2023. On June 9, 2022, the Company’s stockholders approved the First Amendment to the 2020 Plan. On April 17, 2023, the Company’s Board of Directors adopted the Second Amendment to the 2020 Plan, subject to stockholder approval, which increased the shares authorized for potential issuance under the 2020 Plan to 3,069,110 shares of common stock and extended the term of the 2020 Plan to June 6, 2033, and increased the annual cap on director compensation by $50 thousand. On June 6, 2023, the Company’s stockholders approved the Second Amendment to the 2020 Plan.

The 2020 Plan, as amended, is administered by the Compensation Committee which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan.

In connection with incentive stock options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). The aggregate fair market value (determined at the time of the grant) of stock with respect to which incentive stock options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its affiliates) shall not exceed $100 thousand, and the options in excess of $100 thousand shall be deemed to be non-qualified stock options, including prices, duration, transferability and limitations on exercise. The maximum number of shares of common stock that may be issued under the 2020 Plan pursuant to incentive stock options may not exceed, in the aggregate, 1,000,000.

The Company has issued non-qualified stock options pursuant to contractual agreements with non-employees. Options granted under the agreements are expensed when the related service or product is provided. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value represent management’s best estimates and involve inherent uncertainties and judgements.

Stock Options

The following table summarizes the activities for the Company’s stock options as of December 31, 2023, and 2022:

	Options Outstanding
					Weighted -
					Average
					Remaining		Aggregate
				Weighted-	Contractual		Intrinsic
	Number of			Average	Term		Value
	Shares			Exercise Price	(in years)		(in thousands)(1)
Balance as of December 31, 2021	465,471		$	4.38
Granted	-			-
Forfeited/Cancelled/Expired	(128,000	)		3.74
Balance as of December 31, 2022	337,471			4.63
Exercisable as of December 31, 2022	337,471		$	4.63	2.4	$	-
Granted	-			-
Forfeited/Cancelled/Expired	(36,000	)		5.17
Balance as of December 31, 2023	301,471			4.56
Exercisable as of December 31, 2023	301,471		$	4.56	1.2	$	-

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. 

As of December 31, 2023, and 2022, the Company had no unvested stock options.

During the year ended December 31, 2023, and 2022, the Company expensed $0 thousand with respect to options.

As of December 31, 2023, and 2022, there was $0 unrecognized compensation cost related to outstanding stock options.

Restricted Stock Awards and Restricted Stock Units

The following table summarizes the unvested restricted stock awards as of December 31, 2023 and 2022:

				Weighted -
				Average
	Number of			Grant
	Award Shares			Date Fair Value
Unvested at December 31, 2021	44,642			4.31
Granted	39,308			3.18
Vested	(42,142	)		4.32
Balance at December 31, 2022	41,808			3.24
Granted	506,194			1.45
Vested	(131,333	)		2.06
Balance at December 31, 2023	416,669		$	1.44

As of December 31, 2023, and 2022, total unrecognized share-based compensation cost related to unvested restricted stock awards was $260 thousand and $2 thousand respectively, which is expected to be recognized over a weighted-average period of 0.44 years as of December 31, 2023.

The following table summarizes the unvested restricted stock units as of December 31, 2023 and 2022:

		Unvested Restricted Stock Units
					Weighted -
					Average
		Number of			Grant
		Unit Shares			Date Fair Value
Unvested at December 31, 2021		187,010			4.11
Granted		418,041			2.14
Vested		(191,425	)		4.07
Unvested at December 31, 2022		413,626			2.14
Granted		272,941			1.35
Vested		(294,261	)		2.51
Forfeited/Cancelled		(21,053	)		1.20
Balance at December 31, 2023	$	371,253		$	1.32

As of December 31, 2023, and 2022, total unrecognized share-based compensation cost related to unvested restricted stock units was $301 thousand and $284 thousand respectively, which is expected to be recognized over a weighted-average period of 1.39 years as of December 31, 2022.

For RSUs with stock price appreciation targets, we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the RSU’s contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value of each grant was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the derived service period and there is no ongoing adjustment or reversal based on actual achievement during the period.

The following table summarizes the unvested performance restricted stock units as of December 31, 2023 and 2022:

	Unvested Performance Restricted Stock Units
				Weighted -
				Average
	Number of			Grant
	Unit Shares			Date Fair Value
Unvested at December 31, 2021		-			-
Granted		432,326			2.95
Vested		-			-
Balance at December 31, 2022		432,326			2.95
Granted		1,156,591			1.16
Vested		-			-
Forfeited/Cancelled		(150,157	)		2.95
Balance at December 31, 2023		1,438,760		$	1.51

As of December 31, 2023, and December 31, 2022 total unrecognized share-based compensation cost related to unvested restricted stock units was $1,778 thousand and $947 thousand, respectively, which is expected to be recognized over a weighted-average period of 1.75 years as of December 31, 2023.

Warrants

The following table summarizes the activities for the Company’s warrants for the year ended December 31, 2023 and 2022:

	Warrants Outstanding (Excluding Pre-Funded Warrants)
	Number of Warrant Shares			Weighted- Average Exercise Price		Weighted - Average Remaining Contractual Term in years)		Aggregate Intrinsic Value (in thousands)(1)
Balance at December 31, 2021		3,779,243		$	5.89
Granted		1,590,150			3.22
Expired		(265,938	)		19.21
Balance at December 31, 2022		5,103,455			4.34
Granted		-			-
Expired		(474,869	)		6.34
Balance at December 31, 2023		4,628,586			4.13		2.3
Exercisable at December 31, 2023		4,628,586			4.13		2.3	$	-

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $1.12 for our common stock on December 31, 2023.

For the year ended December 31, 2023, and 2022, the Company granted 0 warrants and 34,942 warrants to warrant holders pursuant to anti-dilution provisions, 0 warrants and 1,555,208 warrants in conjunction with the Securities Purchase Agreement, respectively (see Note 9 – Stockholders’ Equity). As the fair value of the warrants granted would have had a net zero impact to equity (increasing additional paid in capital and offering costs for the same amount), the Company did not break out or complete a separate valuation of the warrants granted in association with either capital raise. 

Pre-funded Warrants

On April 14, 2022, in connection with our Securities Purchase Agreement, the Company issued 675,000 pre-funded warrants to purchase up to an aggregate of 675,000 shares of common stock at a purchase price of $3.214 per pre-funded warrant, which represented the per share public offering price for the common stock less the $0.001 per share exercise price for each pre-funded warrant. In August 2022, 675,000 pre-funded warrants with an exercise price of $0.001 per share were exercised, and 675,000 shares of the Company’s common stock were issued. No pre-funded warrants are outstanding as of December 31, 2023 or December 31, 2022.