NOTE 8 - STOCK INCENTIVE PLANS

2023 Stock Incentive Plan

On March 7, 2023, the Company’s stockholders approved the 2023 Stock Incentive Plan (“2023 Plan”). The aggregate maximum number of shares of Common Stock that may be issued under the 2023 Plan was 68,723 shares for the 2023 fiscal year; thereafter, the maximum number is limited to 15% of the outstanding shares of Common Stock, calculated on the first business day of each fiscal quarter. As of June 30, 2025, the maximum number of shares of Common Stock that may be issued under the 2023 Plan is 34,023,184. Under the 2023 Plan, options which are forfeited or terminated, settled in cash in lieu of shares of Common Stock, or settled in a manner such that shares are not issued, will again immediately become available to be issued. If shares of Common Stock are withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of Common Stock will be treated as shares that have been issued under the 2023 Plan and will not again be available for issuance.

Stock Options

During the three and six months ended June 30, 2025, the Company issued an aggregate of 93,000 stock options under the 2023 Plan, vesting over a period of four years to employees with an exercise price of $1.50 per share and 11,500 stock options under the 2023 Plan, vesting over a period of four years to employees with an exercise price of $0.02 per share in consideration for services provided to the Company. In addition, 26,668 fully vested stock options were granted to four non-employee directors at an exercise price of $1.50 per share and 2,000,000 fully vested stock options were granted to four non-employee directors at an exercise price of $0.02 per share. The aggregate fair value of the shares issued to the directors was $74.3 thousand. As of June 30, 2025, the unrecognized compensation cost related to non-vested stock options was $0.6 million. 

During the three and six months ended June 30, 2024, the Company issued an aggregate of 55 stock options under the 2023 Plan, vesting over a period of four years to employees with an exercise price of $26.50 per share and 25 stock options under the 2023 Plan, vesting over a period of four years to employees with an exercise price of $25.00 per share in consideration for services provided to the Company. In addition, an aggregate of 1,686 fully vested stock options were granted under the 2023 Plan to five non-employee directors at an exercise price of $26.50 per share, an aggregate of 674 fully vested stock options were granted under the 2023 Plan to three non-employee directors at an exercise price of $43.25 per share and an aggregate of 1,600 fully vested stock options were granted under the 2023 Plan to four non-employee directors at an exercise price of $25.00 per share in each case in consideration for services provided to the Company.  

During the three and six months ended June 30, 2025, 500 stock options were forfeited by participants and 650 stock options were cancelled under the 2023 Plan. During the three and six months ended June 30, 2024, 45 stock options were forfeited by participants under the 2023 Plan.

Restricted Stock

During the three and six months ended June 30, 2025, the Company granted 186,900 shares of restricted Common Stock under the 2023 Plan to five employees and consultants, in accordance with the terms of the applicable employment and consulting agreements with the Company. Such shares vest over four years commencing on January 2, 2025, with a quarter to vest on the anniversary of the grant, and thereafter in quarterly amounts until the entire award has vested, so long as each remains in the service of the Company. The fair value of restricted stock granted was $0.3 million and the unamortized compensation cost as of June 30, 2025, related to all outstanding restricted stock was $0.4 million.

A summary of restricted stock awards is as follows:

2017 Stock Incentive Plan

On August 24, 2017, the Company’s stockholders approved the 2017 Stock Incentive Plan (“2017 SIP”). The aggregate maximum number of shares of Common Stock that were issuable under the 2017 SIP was limited to 10% of the outstanding shares of Common Stock, calculated on the first business day of each fiscal year. Under the 2017 SIP, options that had been forfeited or terminated, settled in cash in lieu of shares of Common Stock, or settled in a manner such that shares were not issued, would immediately become available to be issued again. If shares of Common Stock were withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of Common Stock would have been treated as shares that have been issued under the 2017 SIP and would not have been available for issuance again. On March 7, 2023, the 2017 SIP was terminated upon the approval of the 2023 Plan at the Company’s special meeting of stockholders.

Stock Options

During the three and six months ended June 30, 2025 and 2024, the Company did not issue any stock options under the 2017 SIP.

During the three and six months ended June 30, 2025, 150 stock options were cancelled under the 2017 SIP. During the three and six months ended June 30, 2024, 40 stock options were forfeited by participants under the 2017 SIP.

Restricted Stock

During the three and six months ended June 30, 2025 and 2024, the Company did not issue any restricted stock awards under the 2017 SIP. The unamortized compensation cost as of June 30, 2025, related to all outstanding restricted stock was $54.7 thousand.

A summary of restricted stock awards is as follows:

2013 Long-Term Stock Incentive Plan

On January 4, 2013, the Company’s stockholders approved the Company’s Long-Term Stock Incentive Plan (“2013 LTIP”). The maximum number of shares of Common Stock that were issuable under the 2013 LTIP, including stock awards, stock issued to the Company’s Board, and stock appreciation rights, was limited to 10% of the outstanding shares of Common Stock, calculated on the first business day of any fiscal year. The 2013 LTIP expired in accordance with its terms on January 3, 2023.

During the three and six months ended June 30, 2025 and 2024, the Company did not issue any stock options under the 2013 LTIP.

During the three and six months ended June 30, 2025, 330 stock options were cancelled under the 2013 LTIP. During the three and six months ended June 30, 2024, no stock options were forfeited by participants under the 2013 LTIP.

Stock Option Modification

During the six months ended June 30, 2025, the Company cancelled 1,130 outstanding stock options under the 2023 Plan, the 2017 SIP and the 2013 LTIP and granted new stock options under the 2023 Plan which resulted in a new exercise price of $1.50 per share and the issuance of 87,000 stock options. The new stock options continue to vest based on the original vesting schedule that had been attributable to the cancelled stock options. This resulted in an incremental stock-based compensation expense of $69.4 thousand recorded as of the modification date.

Stock-based Compensation Expense 

Total stock-based compensation expense during the three and six months ended June 30, 2025 pertaining to awards under the 2023 Plan and the 2017 SIP amounted to $0.4 million and $0.8 million, respectively. Total stock-based compensation expense during the three and six months ended June 30, 2024 pertaining to awards under the 2023 Plan, the 2017 SIP and the 2013 LTIP amounted to $0.4 million and $0.8 million, respectively.