| STOCK-BASED COMPENSATION |
Note
13. STOCK-BASED COMPENSATION
The
Company granted options and restricted stock awards under its 2014 Equity Incentive Plan (the “2014 Plan”). Under the 2014
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 2014 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 Plan expired according to the respective 10-year
term of the 2014 Plan in March 2024. A new 2024 Incentive Compensation Plan (the “2024 Plan”) was approved 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 statements of operations:
SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION AWARDS
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| | |
Three Months Ended
June 30, | | |
Six Months Ended
June 30, | |
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| | |
| | |
| | |
| | |
| |
| Research and development | |
$ | (8,334 | ) | |
$ | 35,345 | | |
$ | 12,916 | | |
$ | 57,227 | |
| General and administrative | |
| 219,941 | | |
| 251,949 | | |
| 525,307 | | |
| 512,680 | |
| Total stock-based compensation
expense | |
$ | 211,607 | | |
$ | 287,294 | | |
$ | 538,223 | | |
$ | 569,907 | |
The
following table summarizes stock option activity under the 2014 Plan and 2024 Plan:
SUMMARY OF OPTION ACTIVITY
| | |
Number of
options | | |
Weighted-average
exercise price | | |
Weighted-average
remaining contractual
term (in years) | | |
Aggregate
intrinsic value | |
| Outstanding at December 31, 2024 | |
| 304,125 | | |
$ | 6.95 | | |
| 4.45 | | |
| — | |
| Granted | |
| — | | |
| — | | |
| — | | |
| — | |
| Exercised | |
| — | | |
| — | | |
| — | | |
| — | |
| Forfeited | |
| — | | |
| — | | |
| — | | |
| — | |
| Outstanding at June 30, 2025 | |
| 304,125 | | |
$ | 6.95 | | |
| 3.90 | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Vested and exercisable at June 30, 2025 | |
| 304,125 | | |
$ | 6.95 | | |
| 3.90 | | |
| — | |
As
of June 30, 2025, there was no unrecognized compensation cost related to non-vested stock options.
The
following table summarizes restricted stock award activity under the 2014 Plan and 2024 Plan:
SUMMARY OF RESTRICTED STOCK AWARD
| | |
Number of | | |
| | |
| | |
As of June 30, 2025 | |
| | |
restricted
stock awards
(RSA) | | |
Weighted-
average
grant price | | |
FMV on
grant date | | |
Vested
number
of RSA | | |
Unvested
number
of RSA | |
| Balance at December 31, 2024 | |
| 1,326,861 | | |
$ | 1.99 | | |
$ | 2,636,259 | | |
| 1,215,592 | | |
| 171,671 | |
| Granted | |
| 258,398 | | |
| 0.81 | | |
| 208,559 | | |
| 121,408 | | |
| 136,990 | |
| Forfeited | |
| (25,721 | ) | |
| 0.81 | | |
| (20,834 | ) | |
| — | | |
| (25,721 | ) |
| Balance at June 30, 2025 | |
| 1,559,538 | | |
$ | 1.81 | | |
$ | 2,823,984 | | |
| 1,139,496 | | |
| 282,940 | |
During
the three months ended June 30, 2025, the Company issued restricted stock awards (“RSAs”) for 5,000 shares of Common Stock
to employees, non-employees, and the board of directors. The shares vest in equal monthly installments over terms of immediately and
up to three years, subject to the employees and non-employees providing continuous service through the vesting date. During the six months
ended June 30, 2025, 172,660 shares vested from RSAs granted prior to January 1, 2025, and 121,408 shares vested from RSAs granted during
the six months ended June 30, 2025.
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