Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Stockholders' Equity

Stockholders' Equity

10. Stockholders’ Equity

Common Stock Offering

On March 9, 2024, we closed the offering contemplated by the Underwriting Agreement that the Company entered into on March 7, 2024 (the “Agreement”) with ThinkEquity, LLC, as representative of the several underwriters named therein (the “Underwriters”), pursuant to which the Company issued and sold 10,000,000 shares of our Common Stock at a price of $0.15 per share for net proceeds of $1,235,000.

Common Stock Warrants

As of March 31, 2024 and December 31, 2023, the Company had no outstanding warrants.

The following table summarizes the activity of the Company’s common stock warrants for the three months ended March 31, 2023.

	Common Stock
	Warrants
Outstanding, December 31, 2022	747,383
Expired	(31,000)
Outstanding, March 31, 2023	716,383

Equity Compensation Plans

The Company maintains various equity compensation plans (“Plans”) with substantially similar provisions under which it may award employees, directors and consultants incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the plans.

Accounting for Stock-Based Compensation:

Stock Compensation Expense - For the three months ended March 31, 2024 and 2023, the Company recorded $0.3 million and $0.8 million of stock-based compensation expense, respectively. No compensation expense for employees with stock awards was capitalized during the three months ended March 31, 2024 and 2023.

Stock Options - Under the Plans, the Company has issued stock options. A stock option grant gives the holder the right, but not the obligation, to purchase a certain number of shares at a predetermined price for a specific period of time. The Company typically issues options that vest over four years in equal installments beginning on the first anniversary of the date of grant. Under the terms of the Plans, the contractual life of the option grants may not exceed ten years

Fair Value Determination – The Company has used the Black-Scholes option pricing model to determine the fair value of its stock option awards on the date of grant. The Company will reconsider the use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model.

Stock Option Activity – No options were granted during the three months ended March 31, 2024 or March 31, 2023.

The following is a summary of the stock option activity for the three months ended March 31, 2024:

		Weighted				Weighted
		Average		Aggregate		Average
		Exercise		Intrinsic		Remaining
	Shares	Price		Value		Contractual Life
Stock options outstanding at December 31, 2023	6,438,931	$	3.63	$	9,052
Expired	(193,308)		4.79
Forfeited	(35,006)		2.13
Stock options outstanding and expected to vest at March 31, 2024	6,210,617	$	3.60	$	3,158	8.0	Years
Stock options exercisable at March 31, 2024	4,636,176	$	4.37	$	3,158	7.7	Years

Unrecognized compensation expense related to unvested stock options was $1.7 million as of March 31, 2024, which is expected to be recognized over a weighted-average period of 0.9 years and will be adjusted for forfeitures as they occur.

Restricted Stock - Under the Plans, the Company has issued restricted stock. A restricted stock award is an issuance of shares that cannot be sold or transferred by the recipient until the vesting period lapses. The grant date fair value of the restricted stock is equal to the closing market price of the Company’s common stock on the date of grant. There was no restricted stock award activity for the three months ended March 31, 2024.

The following is a summary of restricted stock unit activity for the three months ended March 31, 2023:

		Weighted
		Average
	Shares	Fair Value
Restricted stock at December 31, 2022	34,001	$	3.22
Vested	(34,001)		3.22
Restricted stock at March 31, 2023	—	$	—

Restricted Stock Units - Under the Plans, the Company may issue time-based Restricted Stock Units (“RSUs”). RSUs are not actual shares, but rather a right to receive shares in the future. The shares are not issued and the employee cannot sell or transfer shares prior to vesting and has no voting rights until the RSUs vest. The employees' time-based RSUs vest pro-rata over 36 months. The grant date fair value of the RSUs is equal to the closing market price of the Company’s common stock on the grant date. The Company recognizes the grant date fair value of RSUs the Company expects to issue as compensation expense ratably over the requisite service period.

The following is a summary of restricted stock unit activity for the three months ended March 31, 2024:

		Weighted
		Average
	Shares	Fair Value
RSUs at December 31, 2023	250,000	$	1.18
Vested	(10,000)		1.18
Cancelled	(240,000)		1.18
RSUs at March 31, 2024	—	$	—

There was no restricted stock unit activity for the three months ended March 31, 2023.