Stock-based Compensation | NOTE 10— Stock-based Compensation As of December 31, 2023, the Company had the 2012 Equity Incentive Plan (the “2012 Option Plan”), 2019 Equity Incentive Plan (the “2019 Option Plan”) and the 2019 Employee Stock Purchase Plan (“ESPP”) in place. The 2019 Option Plan provides for the grant of incentive and non-statutory stock options (“Options”), stock appreciation rights (“SAR”), restricted stock awards (“RSA”), and restricted stock unit awards (“RSU”) to employees, nonemployee directors, and consultants of the Company. Option awards granted under the 2019 Option Plan generally become exercisable ratably over a two four ten years no 100 110 five years The Board of Directors adopted, and its stockholders approved, the ESPP and the 2019 Option Plan in March 2019 and April 2019, respectively, each of which became effective in connection with the IPO. As of December 31, 2023, there were 158,337 shares of common stock available to be issued under the ESPP. The number of shares of common stock reserved for issuance under the ESPP automatically increases on January 1 of each calendar year for 10 years, starting January 1, 2020, and ending on, and including, January 1, 2029, in an amount equal to the lesser of 1 st 50,000 As of December 31, 2023, there were 1,843,128 shares of common stock available to be issued under the 2019 Option Plan, plus the number of shares subject to outstanding stock options or other stock awards that were granted under the 2012 Option Plan that are forfeited, terminated, expired or are otherwise not issued. Additionally, the number of shares of common stock reserved for issuance under the 2019 Option Plan automatically increases on January 1 of each calendar year for 10 years, starting January 1, 2020 and ending on and including January 1, 2029, in an amount equal to 5 st 2,038,734 shares and 940,444 shares, respectively. In July 2022, the Board of Directors approved an increase in the number of shares of common stock reserved for future issuance under the 2019 Option Plan by 5,000,000 shares, which was approved by the Company’s stockholders on October 26, 2022. In August 2023, the Board of Directors approved an increase in the number of shares of common stock reserved for future issuance under the 2019 Option Plan by 2,000,000 shares, which was approved by the Company’s stockholders on September 28, 2023. For the years ended December 31, 2023 and 2022, zero Stock-based compensation expense is as follows: Schedule of Stock Based Compensation Expense 2023 2022 For the Year Ended December 31, 2023 2022 Research and development $ 84 $ 18 Sales and marketing 377 68 General and administrative 934 1,426 Cost of revenues 101 39 Total $ 1,496 $ 1,551 On January 27, 2022, 415,023 254 In the third quarter of 2022, 385,599 260 260 During the year ended December 31, 2023, 457,354 230,000 498 388 110 Stock Options: Stock option activity for the years ended December 31, 2023 and 2022 is as follows: Schedule of Stock Option Activity Weighted average exercise price Weighted average remaining contractual life Aggregate Intrinsic Options per share (in years) Value * Outstanding at January 1, 2022 95,413 $ 40.00 6.73 $ 0 Options granted 4,414,419 $ 0.44 Options exercised — $ — Options forfeited (15,303 ) $ 33.65 Options cancelled (18,314 ) $ 49.67 Outstanding at December 31, 2022 4,476,215 $ 0.95 9.76 $ 358 Options granted 1,803,000 $ 0.57 Options exercised (1,125,000 ) $ 0.42 Options forfeited — $ — Options cancelled (7,833 ) $ 4.50 Outstanding at December 31, 2023 5,146,382 $ 0.93 8.94 $ 1,370 Vested and expected to vest at December 31, 2023 5,146,382 $ 0.93 8.94 $ 1,370 Exercisable at December 31, 2023 609,948 $ 4.00 8.55 $ 167 * The intrinsic value is calculated as the difference between the exercise price and the fair value of the common stock on the balance sheet date. On December 26, 2023, an employee exercised 125,000 As of December 31, 2023, there was approximately $ 1,395 1.53 The total pre-tax intrinsic value of options exercised during the year ended December 31, 2023 was $ 196 The weighted average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $ 0.57 0.40 The fair value of stock options is determined using the Black-Scholes option-pricing model using various inputs, including the Company’s estimates of the fair value of common stock on the date of grant, expected term, expected volatility, risk-free interest rate, and expectations regarding future dividends. Stock-based compensation also reflects the Company’s estimate regarding the portion of awards that may be forfeited. The following describes the key inputs used by the Company: Fair Value of Common Stock—The Company measures equity classified stock-based awards granted to employees, consultants, and directors based on the estimated fair value on the date of grant, and the expense is recognized on a straight-line basis over the vesting period. Expected Term—The expected term represents the period that the Company’s stock options are expected to be outstanding. The majority of stock option grants are considered to be “plain vanilla” and thus the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. Expected Volatility—The expected volatility was derived from the historical stock volatility of the Company’s common stock since its IPO in May 2019. Risk-Free Interest Rate—The risk-free interest rate is based on the interest yield in effect at the date of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term. Dividend Rate—The expected dividend rate was assumed to be zero, as the Company has not previously paid dividends on common stock and has no current plans to do so. Forfeiture Rate—Forfeitures are recognized when they occur. Historically, the Company estimated the forfeiture rate based on an analysis of actual forfeiture experience, analysis of employee turnover behavior, and other factors. The following represents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of each stock option granted during the year ended December 31, 2023: Schedule of Fair Value Option grants Expected dividend yield 0 % Risk-free interest rate 3.81 % Expected volatility 114 % Expected life (in years) 5.6 Restricted Stock Awards: During 2022, 385,599 260 During 2023, 457,354 305 Restricted Stock Units: The Company accounts for restricted stock units (“RSUs”) issued to employees and non-employees at fair value, based on the market price of the Company’s common stock on the date of grant. The RSUs are expensed over the vesting period, and the Company accounts for forfeitures as they occur. RSUs, primarily issued as incentives, generally vest annually over one to four years. The following table summarized the outstanding RSUs as of December 31, 2023: Schedule of Outstanding Restricted Stock Units RSUs Outstanding at January 1, 2022 860,888 Granted 445,200 Released (619,042 ) Forfeited (5,200 ) Outstanding at December 31, 2023 681,846 As of December 31, 2023, there was approximately $ 391 1.15 |