Note 5 - Stockholders' Equity (Deficit), Stock Option Plans, and Stock-based Compensation

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

5. STOCKHOLDERS' EQUITY (DEFICIT), STOCK OPTION PLANS, AND STOCK-BASED COMPENSATION

Our authorized capital stock consists of:

• 115,000,000 shares of common stock, par value $0.0001 per share; and

• 10,000,000 shares of preferred stock, par value $0.0001 per share.

As of March 31, 2024 there were 27,918,560 shares of our common stock outstanding, and no shares of preferred stock outstanding.

2006 and 2020 Equity Incentive Plans

As of December 31, 2024, there were an aggregate of 1,004,263 shares of common stock available for issuance under the 2020 Equity Incentive Plan, subject to equitable adjustment in the event of stock splits and other capital changes (the “Share Reserve”). Following the December 31, 2023 balance sheet date, in accordance with the “evergreen” provision in our 2020 Equity Incentive Plan, an additional 2,791,856 shares were automatically made available for issuance on the first day of 2024, which represents 10% of the number of shares of the Company’s common stock outstanding on December 31, 2023. As a result, as of March 31, 2024, the Share Reserve available for future awards under the 2020 Equity Incentive Plan stood at 3,816,119 shares, after accounting for the below described increase and the options forfeited in the first quarter of 2024. Pursuant to the Evergreen Provision, the Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1st of the year following the year in which the effective date of the 2020 Equity Incentive Plan occurs, and ending on (and including) January 1, 2030, in an amount equal to the lesser of (i) ten percent (10%) of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year or (ii) such number of shares of common stock determined by the Company’s board of directors (the “Annual Increase”). There were no additional shares reserved in accordance with the “evergreen” provision in our 2020 Equity Incentive Plan during 2023.

As of March 31, 2024, there were outstanding options under the 2006 and 2020 Equity Incentive Plans covering an aggregate of 1,560,574 shares of common stock, of which 844,016 were exercisable as of such date. No new grants of awards are permitted under the 2006 Equity Incentive Plan.

Stock-Based Compensation Expense

The Company records stock-based compensation expense in connection with the amortization of the fair value of stock options granted to employees, non-employee consultants and non-employee directors. During the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation of $0.4 million and $0.1 million, respectively. As of March 31, 2024 the Company had unrecognized stock-based compensation expense of $3.0 million, which is expected to be recognized over a weighted-average period of 2.3 years.

There were no options granted during the three months ended March 31, 2024 and 2023.

Activity under the stock plans for the three months ended March 31, 2024 is as follows:

	Shares Available for Grant		Number of Options Outstanding			Weighted Average Exercise price per share		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Balance, December 31, 2023		1,004,263		1,580,574		$	6.51		9.11	$	300,969
Expired		20,000		(20,000	)		6.74
Evergreen plan increase		2,791,856
Balance, March 31, 2024		3,816,119		1,560,574		$	6.50		8.86	$	18,350
Options exercisable at March 31, 2024				844,016		$	6.82		8.65	$	15,464

For the three months ended March 31, 2024 and 2023, the amount of stock-based compensation expense included within research and development and general and administrative expenses was as follows:

	March 31,
	2024		2023
Research and development	$	194,896	$	41,393
General and administrative		174,179		10,134
Total stock-based compensation	$	369,075	$	51,527