6. 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. On June 16, 2021, the Company’s stockholders voted to approve an amendment to the 2015 Plan to increase the number of shares of common stock authorized for issuance under the 2015 Plan from 416,667 to 833,333 shares. As of March 31, 2025, 37,000 shares remain available for future grants under the 2015 Plan. The 2015 Plan expires on June 29, 2025.

On April 2, 2025, our board of directors approved an Equity Incentive Plan (the “2025 Plan”) that remains subject to shareholder approval and ratification. The 2025 Plan provides for the grant of incentive stock options, qualified stock options, restricted stock awards, restricted stock units, stock appreciation rights, and performance shares or units and cash awards. Awards may be granted under the 2025 Plan to our employees, directors and independent contractors.  the aggregate number of shares of Common Stock which shall be available for grants or payments of Awards under the 2025 Plan during its term shall initially be 1,500,000 (the “Total Plan Shares”). The Total Plan Shares will automatically increase on January 1st of each year, for a period of nine years commencing on January 1, 2026, in an amount equal to 5% of the total number of shares of Common Stock outstanding as of December 31 of the preceding calendar year on a fully diluted basis.

The 2025 Plan also provides that, notwithstanding the annual increase provision, in no event will the increase in Total Plan Shares available under the 2025 Plan pursuant to the increase provision exceed 2,500,000 additional shares (or a total of up to 4,000,000 Total Plan Shares), subject to adjustment as provided under the 2025 Plan. The 2025 Plan is effective as of March 31, 2025; however, the 2025 Plan is subject to approval of our stockholders which the Company is seeking at its annual meeting of stockholders scheduled for June 25, 2025.

Common Stock Reserved for Future Issuance

The following table presents information concerning common stock available for future issuance (in thousands) as of March 31, 2025:

Schedule of Common Stock Available for Future Issuance

Stock Options

The following table summarizes stock option transactions for the 2015 Plan, collectively, for the three months ended March 31, 2025 (in thousands, except per share amounts):

Schedule of Stock Option Transactions

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 three months ended March 31, 2025 and 2024, equity-based compensation expense recorded was approximately $82,000 and $157,000, respectively.

As of March 31, 2025, there was approximately $181,000 of total unrecognized compensation expense related to non-vested stock options that is expected to be recognized over a weighted average period of .65 years. For options granted and outstanding, there were 548,855 options outstanding which were fully vested or expected to vest, with an aggregate intrinsic value of $ 0.00, a weighted average exercise price of $ 10.39 and weighted average remaining contractual term of 6.86 years at March 31, 2025. For vested and exercisable options, outstanding shares totaled 475,480, with an aggregate intrinsic value of $ 0.00. These options had a weighted average exercise price of $ 11.53 per share and a weighted-average remaining contractual term of 6.66 years at March 31, 2025.

The aggregate intrinsic value of outstanding and exercisable options at March 31, 2025 was calculated based on the closing price of the Company’s common stock as reported on The Nasdaq Capital Market on March 31, 2025 of $1.42 per share less the exercise price of the options. The aggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying options.