Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS??? EQUITY AND STOCK-BASED COMPENSATION

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STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION
Amended and Restated 2018 Stock Award and Incentive Plan

The Company’s Amended and Restated 2018 Stock Award and Incentive Plan (the “Plan”) provides for the award of options to purchase the Company’s common stock (“stock options”), restricted stock units ("RSUs"), stock appreciation rights (“SARs”), restricted stock, deferred stock, dividend equivalents, performance shares or other stock-based performance awards and other stock- or cash-based awards. Awards can be granted under the Plan to the Company’s employees, officers and non-employee directors, as well as consultants and advisors of the Company and its subsidiaries.

On June 8, 2023, the Company's Board of Directors approved an amendment to the Plan to modify the one-year minimum vesting requirements.

Stock Options

A summary of the Company's stock option activity during the nine months ended September 30, 2024 is below:
Shares Weighted average exercise price
Outstanding at January 1, 2024 35,599,421 $ 0.78 
Granted 60,000 $ 0.14 
Exercised — $ — 
Forfeited (3,750) $ 0.44 
Expired (406,250) $ 0.93 
Outstanding at September 30, 2024 35,249,421 $ 0.78 

Stock options granted under the Plan generally expire five years from the date of grant. At September 30, 2024, the stock options outstanding had a weighted average remaining life of approximately two years.

The grant date fair value of the stock options granted in the nine months ended September 30, 2024 was estimated using the Black-Scholes valuation model with the following assumptions:

Estimated life (in years)
1.18
Weighted average volatility 64.81%
Weighted average risk-free interest rate 5.12%
Dividend yield —
Restricted Stock Units

Holders of unvested restricted stock units ("RSUs") do not have voting or dividend rights. The grant date fair values of RSUs are recognized as expense on a straight-line basis over the requisite service periods. The fair value of RSUs is determined based on the market value of the shares of the Company's common stock on the date of grant.

The activity related to the Company's RSUs for the nine months ended September 30, 2024 was as follows:
RSUs Weighted average grant date fair value
Unvested at January 1, 2024 5,825,538 $ 0.42 
Granted 3,189,428 $ 0.20 
Vested (2,005,469) $ 0.43 
Forfeited (273,075) $ 0.38 
Outstanding at September 30, 2024 6,736,422 $ 0.31 

Of the 2,005,469 RSUs reported as vested in the table above, 85,071 shares, with an aggregate fair value of approximately $15,000, were surrendered to the Company to satisfy the tax withholding obligations that arose in connection with the vesting of such RSUs.

Warrants

On May 2, 2024, the Company issued warrants to purchase 1,000,000 shares of the Company's common stock to an entity in consideration for introductory and other services rendered in connection with certain funding and acquisition transactions. The warrants have an exercise price of $0.32 per share, vested immediately, and expire on May 1, 2029. The Company calculated that the grant date fair value of the warrants was approximately $218,000 in the aggregate using the Black-Scholes valuation model. This expense is included as a component of Acquisition-related and other in the Company's condensed consolidated statements of operations for the nine months ended September 30, 2024.

At September 30, 2024, warrants to purchase up to 43,089,476 shares of the Company's common stock were outstanding, with a weighted average exercise price of $0.67.

Other Common Stock Issuances

In addition to the activity related to stock options and RSUs, described above, during the nine months ended September 30, 2024, the Company also issued 3,917,267 shares of restricted common stock as purchase consideration (see Note 2) with a grant date fair value of approximately $1 million, and 28,369 shares of restricted common stock with an aggregate fair value of approximately $7,000, under a royalty agreement.

Stock-Based Compensation

The Company recorded stock-based compensation of $0.3 million in each of the three months ended September 30, 2024 and 2023, and $0.8 million in each of the nine months ended September 30, 2024 and 2023.