Stockholders' equity |
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| Stockholders' equity | Stockholders’ Equity Common Stock
The holders of our Common Stock have the right to vote their interest on a per share basis. At December 31, 2023 and 2022, there were 24,850,261 shares of our Common Stock outstanding.
Preferred Stock
On February 13, 2013, we authorized 10 million shares of preferred stock. As of December 31, 2023, no preferred shares were issued or outstanding.
Stock-Based Compensation
We adopted the 2006 Stock Option and Incentive Plan (the “Plan”), under which the board of directors may grant incentive or non-qualified stock options and stock grants to key employees, directors, advisors and our consultants. The Plan was amended at various dates by the Board of Directors to increase the reserved shares of common stock issuable under the Plan to 3,838,750 as of December 31, 2023, and in June 2017 stockholders approved an amendment to extend the termination date of the Plan to January 1, 2026 and to ratify all of our option grants issued after January 1, 2016 (the “Amended Plan”).
Stock options vest based upon the terms within the individual option grants, with an acceleration of the unvested portion of such options upon a change in control event, as defined in the Amended Plan. The options are not transferable except by will or domestic relations order. The option price per share under the Amended Plan cannot be less than the fair market value of the underlying shares on the date of the grant. The number of shares remaining available for future issuance under the Amended Plan as of December 31, 2023 and 2022 was 243,818 and 146,393, respectively.
In 2023, there were no option grants issued under the Plan.
In 2022, we granted nonqualified options to purchase an aggregate of 761,650 shares of common stock at $1.10 per share and $1.20 per share to certain officers and employees. These options have a vesting schedule of four years and expire in ten years. The fair value of the options issued in 2023 was $321,910. The weighted-average grant date fair value of stock options granted during 2022 was $0.42 per share.
We adopted the 2022 Stock Incentive Plan (the "2022 Plan"), under which the Board of Directors may grant incentive or non-qualified stock options and stock grants to key employees, directors, advisors and consultants. We have reserved 3,800,000 shares of our common stock for issuance pursuant to awards under the 2022 Plan. The adoption of the 2022 Plan was approved by our shareholders on June 9, 2022.
Under the 2022 Plan, stock options vest based upon the terms within the individual option grants, with an acceleration of the unvested portion of such options upon a change in control event, as defined in the 2022 Plan. The options are not transferable except by will or domestic relations order. The option price per share under the 2022 Plan cannot be less than the fair market value of the underlying shares on the date of the grant.
During the year ended December 31, 2023, we granted nonqualified options under the 2022 Plan to purchase an aggregate of 575,000 shares of common stock at prices between $0.88 per share and $1.10 per share to certain directors, officers and employees These options have a vesting schedule of two or four years and expire in ten years. The fair value of the options issued in 2023 was $244,625. The weighted-average grant date fair value of stock options granted during 2023 was $0.43 per share.
During the year ended December 31, 2022, we granted nonqualified options under the 2022 Plan to purchase an aggregate of 275,000 shares of common stock at prices between $1.00 per share and $1.41 per share to certain directors. These options have a vesting schedule of four years and expire in ten years. The fair value of the options issued in 2022 was $145,600. The weighted-average grant date fair value of stock options granted during 2022 was $0.53 per share
The number of shares remaining available for future issuance under the 2022 Plan as of December 31, 2023 was 3,068,750.
In 2023 and 2022, there were no options exercised.
Stock option activity for the year ended December 31, 2023 was as follows:
We used a forfeiture rate of 15% to calculate the expected to vest shares in the table above. We use the Black-Scholes option pricing model to determine the fair value of stock options granted. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the average volatility of four comparable publicly traded companies. The average expected life was estimated using the simplified method to determine the expected life based on the vesting period and contractual terms, since we do not have the necessary historical exercise data to determine an expected life for stock options. We use a single weighted-average expected life to value option awards and recognize compensation on a straight-line basis over the requisite service period for each separately vesting portion of the awards. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term which approximates the expected life assumed at the date of grant.
The weighted average assumptions used in the Black-Scholes option pricing model for options granted in 2023 and 2022 are as follows:
During the years ended December 31, 2023 and 2022, we recognized stock-based compensation expense of $250,394 and $334,149, respectively, related to the issuance of stock options. No tax benefit was recognized related to the stock-based compensation expense recorded during either of the years. At December 31, 2023 and 2022, the total compensation cost related to unvested stock option awards not yet recognized is $451,298 and $500,059, respectively. The unvested stock compensation at December 31, 2023 will be recognized over a weighted average period of 2.77 years.
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