v3.25.2
Note 13 - Stock-based Compensation
6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]
Note 13. Stock-Based Compensation
 
2018 Equity Incentive Plan

The 2018 Equity Incentive Plan (the "2018 Plan") was replaced by the 2023 Equity Incentive Plan (the "2023 Plan"), as described below. As of  June 30, 2025, 7 stock options granted under the 2018 Plan remained outstanding; 3 expire in June 2028 and 4 expire in January 2030. 

 

2018 Employee Stock Purchase Plan

 

In April 2024, the Company formally terminated the 2018 Employee Stock Purchase Plan (the “ESPP”). Since inception through termination, the Company issued 95 shares under the ESPP. Upon termination, all reserved shares were released back to the authorized pool.

 

2020 Inducement Equity Incentive Plan

 

The Company adopted the 2020 Inducement Equity Incentive Plan (the “2020 Plan”) in March 2020 and terminated it in April 2024. On adoption, 64 shares were reserved for issuance. At termination, the remaining reserved shares were released back to the authorized pool. No shares are reserved for future issuance under the 2020 Plan as of  June 30, 2025 and December 31, 2024.

 

2023 Equity Incentive Plan

 

In July 2023, the Company’s stockholders approved the 2023 Plan as defined above, which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants. Stock options granted under the 2023 Plan to employees and consultants generally will vest annually over a five-year period or as determined by the Board’s Compensation Committee (the "Committee"), while grants to non-employee directors vest as determined by the Committee. As of  June 30, 2025 and  December 31, 2024,  945,305 and  926,882 shares of common stock were reserved for issuance pursuant to future awards under the 2023 Plan. The number of shares available for issuance under the 2023 Plan also includes a quarterly increase commencing on September 1, 2023 by an amount equal to the lesser of (i) 10% of the number equal to the number of shares of common stock outstanding on the applicable adjustment date less the number of shares of common stock outstanding at the beginning of the fiscal quarter immediately preceding the adjustment date, but if such number is a negative number, then the increase will be zero; or (ii) such lesser number of shares as may be determined by the Board.

 

For the six months ended June 30, 2025, the Committee approved 1,747,500 stock options with service-based conditions and 380,000 stock options with performance based conditions. The stock options with service-based conditions vest in equal installments over requisite service periods ranging from 2 to 5 years. Of the stock options with performance-based conditions, 225,000 contain performance conditions related to the achievement of specified quarterly sales targets in 2025 (“quarterly sales performance conditions”) and 155,000 contain performance conditions related to the achievement of tiered sales targets for 2025 (“tiered sales performance conditions”). As of June 30, 2025, none of the quarterly sales performance conditions have been met and only 50% of the tiered sales performance conditions are expected to be met. 

 

The options granted for the 2023 Plan for the  six months ended June 30, 2025 were valued using the Black-Scholes model based on the following assumptions on the date of issue:
 
Options with Time-Based Vesting Conditions
 
  Employee Options (5 years) Issued June 20, 2025  

Non-Employee Director Options Issued January 29, 2025

  CEO Options Issued January 29, 2025  

Employee Options (4 years) Issued January 29, 2025

  

Employee Options (5 years) Issued January 29, 2025

 

Risk-free interest rate

  4.38%  4.55%  4.55%  4.55%  4.55%

Volatility

  100%  98.00%  97.50%  97.40%  98.20%

Expected dividend yield

  0.00%  0.00%  0.00%  0.00%  0.00%

Expected life (in years)

  6.5   5.5   5.8   6.0   6.5 
 

Options with Performance-Based Vesting Conditions

 

  Employee Options with Quarterly Sales Targets Issued January 29, 2025  Employee Options with Tiered Sales Targets Issued January 29, 2025 

Risk-free interest rate

  4.55%  4.55%

Volatility

  98.40%  98.00%

Expected dividend yield

  0.00%  0.00%

Expected life (in years)

  5.3   5.5 

 

The following is a summary of stock option activity for the 2023 Plan options for the six months ended June 30, 2025:

 

      

Weighted

  

Weighted

     
      

Average

  

Average

  

Aggregate

 
  Stock  Exercise  Remaining  Intrinsic Value 
  

Options

  

Price

  

Life

  

(in thousands)

 

Outstanding at December 31, 2024

  70,605  $20.88   8.38  $ 

Options exercised

            

Options granted

  2,127,500   0.40       

Cancelled/forfeited

  (287,670)  0.49       

Outstanding at June 30, 2025

  1,910,435  $1.14   9.50  $ 

Vested and expected to vest at June 30, 2025

  1,910,435  $1.14   9.50  $ 

Exercisable at June 30, 2025

  281,204  $4.94   8.46  $ 

 

The weighted-average grant-date fair value of the 2023 Plan options granted during the six months ended June 30, 2025 was $0.27 per share.

 

Non-Plan Options Issued

 

On January 6, 2025, the Board approved and issued a total of 500,000 Non-Plan Options as an employee incentive to the Chief Financial Officer. The options vest monthly over 3 years with an exercise price of $0.53 and an expiration date of January 6, 2035.

 

The Non-Plan Options issued were valued using the Black-Scholes model based on the following assumptions on the date of issue:

 

  

Non-Plan Options Issued January 6, 2025

 

Risk-free interest rate

  4.62%

Volatility

  97.00%

Expected dividend yield

  0.00%

Expected life (in years)

  5.8 

 

The following is a summary of stock option activity for the Non-Plan options for the six months ended June 30, 2025:

 

      

Weighted

  

Weighted

     
      

Average

  

Average

  

Aggregate

 
  Stock  Exercise  Remaining  Intrinsic Value 
  

Options

  

Price

  

Life

  

(in thousands)

 

Outstanding at December 31, 2024

  25,000  $5.32   9.33  $ 

Options exercised

            

Options granted

  500,000   0.53       

Cancelled/forfeited

  (20,000)  5.32       

Outstanding at June 30, 2025

  505,000  $0.58   9.43  $ 

Vested and expected to vest at June 30, 2025

  505,000  $0.58   9.43  $ 

Exercisable at June 30, 2025

  74,445  $0.85   8.89  $ 

 

The weighted-average grant-date fair value of the Non-Plan options granted during the six months ended June 30, 2025 was $0.42 per share.

 

Restricted Stock Awards

 

A summary of the restricted stock award activity for the six months ended June 30, 2025 is presented below:

 

      

Weighted

 
      

Average

 
  Restricted  Grant Date 
  

Stock Awards

  

Fair Value

 

Outstanding at December 31, 2024

    $ 

Granted

  100,000   0.47 

Vested

  (100,000)  0.47 

Cancelled/forfeited

      

Outstanding at June 30, 2025

    $ 

 

Stock-based compensation expense is recorded in selling, general and administrative expenses in the condensed consolidated statements of operations. Stock-based compensation expense for the three and six months ended June 30, 2025 was $98 thousand and $189 thousand, respectively. Stock-based compensation expense for the three and six months ended June 30, 2024  was $13 thousand and $19 thousand, respectively. 

 

Total unrecognized estimated stock-based compensation expense by award type and the remaining weighted average recognition period over which such expense is expected to be recognized at  June 30, 2025 was as follows:

 

  

Unrecognized Expense (in thousands)

  

Remaining Weighted Average Recognition Period

 

Stock options (Non-Plan Options)

 $175   2.5 

Stock options (2023 Plan Options)

 $609   3.4 

Restricted stock awards

 $