7. Stock Based Awards

Equity Incentive Plans

The Company adopted an equity incentive plan in 2015 (the “2015 Plan”) under which 833,333 shares of common stock have been reserved for issuance to employees, and non-employee directors and consultants of the Company. Recipients of incentive stock options granted under the 2015 Plan shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2015 Plan is ten years. As of December 31, 2024, 27,000 shares remain available for future grants under the 2015 Plan.

Common Stock Reserved for Future Issuance

The following table presents information concerning common stock available for future issuance (in thousands) as of December 31, 2024:

Schedule of Common Stock Available for Future Issuance 

Stock Options

The following table summarizes stock option transactions for the 2015 Plan, collectively, for year ended December 31, 2024 (in thousands, except per share amounts):

 Schedule of Stock Option Transactions

No options were granted during the year ended December 31, 2024. During the year ended December 31, 2023 the Company granted stock options to officers, directors, employees and consultants to purchase a total of 209,216 shares of common stock. The options have an exercise price of $2.67 per share, expire in ten years, and vest as follows: one half vests on the one-year anniversary of the grant date and the remainder will vest in eight equal quarterly increments with the first such quarterly increment vesting on September 30, 2023. The total fair value of these options at the grant date was approximately $470,000 using the Black-Scholes Option pricing model. The Black-Scholes option pricing model includes the following weighted average assumptions for grants made during the year ended December 31, 2023:

Schedule of Weighted Average Assumptions Used for Grants

For options granted and outstanding, there were 550,000 options outstanding which were fully vested or expected to vest, a weighted average exercise price of $10.37 and weighted average remaining contractual term of 7.22 years at December 31, 2024. For vested and exercisable options, outstanding shares totalled 453,000. These options had a weighted average exercise price of $11.92 per share and a weighted-average remaining contractual term of 6.98 years at December 31, 2024.

The aggregate intrinsic value of outstanding and exercisable options at December 31, 2024 was calculated based on the positive difference between the closing price of the Company’s common stock as reported on the Nasdaq Capital Market on December 31, 2024 of approximately $2.02 per share and the exercise price of the underlying options. As of December 31, 2024, total outstanding and exercisable options had no intrinsic value.

Common Stock Reserved for Future Issuance

The following table presents information concerning common stock available for future issuance as of December 31, (in thousands):

Schedule of Common Stock Reserved for Future Issuance

Restricted Stock Units

On August 12, 2024, the Company’s Compensation Committee approved the issuance of 256,000 restricted stock unit (“RSU”) awards to non-employee directors, officers, consultants and employees. The aggregate fair value of the restricted stock unit awards granted was estimated to be $451,000 using the market price of the stock on the date of the grant which is expensed using the straight-line method over the vesting period.

 Schedule of Restricted Stock Units

The Company accounts for share-based awards to employees and nonemployee directors and consultants in accordance with the provisions of ASC 718, Compensation—Stock Compensation., and under the recently issued guidance following FASB’s pronouncement, ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC 718, and applicable updates adopted, share-based awards are valued at fair value on the date of grant and that fair value is recognized over the requisite service, or vesting, period. The Company values its equity awards using the Black-Scholes option pricing model, and accounts for forfeitures when they occur. For the twelve months ended December 31, 2024 and 2023, equity-based compensation expense recorded on vested options and RSU was $643,000 and 801,000, respectively. As of December 31, 2024, there was approximately $252,000 of total unrecognized compensation expense related to non-vested stock options that is expected to be recognized over a weighted average period of 0.4 years.