Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

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STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

Note 13. STOCK-BASED COMPENSATION

 

The Company grants options and restricted stock awards under its 2014 Equity Incentive Plan (the “Plan”). Under the Plan, the Company is authorized to grant options or restricted stock for up to 2,000,000 shares of Common Stock. On June 6, 2023, the Company received stockholder approval to increase the number of authorized shares from 1,142,857 to 2,000,000. Options or restricted stock awards may be granted to employees, the Company’s board of directors, and external consultants who provide services to the Company. Options and restricted stock awards granted under the Plan have vesting schedules with terms of one to three years and become fully exercisable based on specific terms imposed at the date of grant. The 2014 Equity Incentive Plan expired according to the respective 10 year terms of the Plan in March 2024. A new 2024 Employee Incentive Plan (“2024 Plan”) has been drafted for resolution to a majority Shareholder vote held at the Annual Meeting of Shareholders on June 4, 2024.

 

The Company has recorded stock-based compensation expense related to the issuance of restricted stock awards in the following line items in the accompanying condensed consolidated statement of operations:

 

    2024     2023  
    Three Months Ended March 31,  
    2024     2023  
             
Research and development   $ 21,882     $ 11,268  
Selling, general and administrative     260,731       146,345  
Total stock-based compensation expense   $ 282,613     $ 157,613  

 

 

The following table summarizes stock option activity under the Plan:

 

    Number of
options		     Weighted-average
exercise price		     Weighted-average
remaining contractual
term (in years)		     Aggregate
intrinsic value		  
Outstanding at December 31, 2023     683,695     $ 3.99       2.9       158,332  
Granted     —       —                  
Exercised     (64,848 )     1.155                  
Forfeited     —       —                  
Outstanding at March 31, 2024     618,847     $ 4.28       2.7     $ 243,097  
                                 
Vested and exercisable at March 31, 2024     618,053     $ 4.28       2.7     $ 243,097  

 

As of March 31, 2024, there was no unrecognized compensation cost related to non-vested stock options.

 

During the three months ended March 31, 2024, 64,848 options were exercised at an exercise price of $1.155 for proceeds of $74,899. During the three months ended March 31, 2023, there were no options exercised.

 

The following table summarizes restricted stock award activity under the Plan:

 

    Number of
restricted stock
awards (RSA)		     Weighted-average
grant price		     FMV on
grant date		     Vested number
of RSA		     Unvested number
of RSA		  
Balance at December 31, 2023     540,967     $ 2.24     $ 1,209,391       441,059       99,908  
Granted     344,251       1.53       528,013       146,297       197,954  
Forfeited     —       —       —       —       —  
Balance at March 31, 2024     885,218     $ 1.96     $ 1,737,404       587,356       297,862  

 

During the three months ended March 31, 2024, the Company issued restricted stock awards (“RSAs”) for 344,251 shares of Common Stock to employees, non-employees, and the board of directors. The shares vest in equal monthly installments over terms of between immediately up to three years, subject to the employees and non-employees providing continuous service through the vesting date. During the three months ended March 31, 2024, 10,736 shares vested from RSAs granted prior to January 1, 2024, and 146,297 shares vested from RSAs granted during the three months ended March 31, 2024.