Note 13. STOCK-BASED COMPENSATION

 

Under the Company’s 2014 Equity Incentive Plan (the “2014 Plan”), the Company is authorized to grant options or restricted stock for up to 66,666 shares of Common Stock. On June 6, 2023, the Company received stockholder approval to increase the number of authorized shares from 38,095 to 66,666, adjusted for the 30-1 reverse split. Options or restricted stock awards may be granted to employees, the Company’s board of directors, and external consultants who provide services to the Company. Options and restricted stock awards granted under the 2014 Plan have vesting schedules with terms of one to three years and become fully exercisable based on specific terms imposed at the date of grant. The 2014 Plan expired at the end of its 10-year term in March 2024. A new 2024 Incentive Compensation Plan (the “2024 Plan”) was approved at the Annual Meeting of Shareholders on June 4, 2024.

 

The Company has recorded stock-based compensation expense related to the issuance of restricted stock awards in the following line items in the accompanying consolidated statements of operations:

 

  

Year Ended

December 31,

 
   2025   2024 
         
Research and development  $51,953   $99,174 
Clinical   10,282    

10,000

 
Selling, general and administrative   609,239    880,507 
Total stock-based compensation expense  $671,474   $989,681 

 

The following table summarizes stock option activity under the 2014 and 2024 Plans:

 

   Number of
options
   Weighted-average
exercise price
   Weighted-average
remaining contractual
term (in years)
   Aggregate
intrinsic value
 
Outstanding at December 31, 2024   9,649   $207.84    4.45     
Granted                
Exercised                
Forfeited   (594)   147.28         
Outstanding at December 31, 2025   9,055   $211.56    3.67     
                     
Vested and exercisable at December 31, 2025   9,055   $211.56    3.67     

 

As of December 31, 2025, there was no unrecognized compensation cost related to non-vested stock options.

 

 

Restricted Stock Awards

 

The following table summarizes restricted stock award activity under the 2014 and 2024 Plan:

 

   Number of           As of December 31, 2025 
   restricted
stock awards
(RSA)
   Weighted-
average
grant price
   FMV on
grant date
   Vested
number
of RSA
   Unvested
number
of RSA
 
Balance at December 31, 2024   44,261   $56.88   $2,517,630    40,244    3,859 
Granted   8,598    22.37    214,003    7,195    512 
Forfeited   (1,049)   21.30    (21,651)        
Balance at December 31, 2025   51,810   $51.87   $2,709,982    47,439    4,371 

 

During the year ended December 31, 2025, the Company issued restricted stock awards (“RSAs”) for 8,598 shares of Common Stock to employees, non-employees, and the board of directors. The shares vest in equal monthly installments over terms of immediately and up to three years, subject to the employees and non-employees providing continuous service through the vesting date. During the year ended December 31, 2025, 7,195 shares vested from RSAs granted in 2025, and 7,621 shares vested from RSA’s granted prior to 2025.

 

Historical Timeline

Fiscal YearFiled
2025Mar 16, 2026Showing above
2024Mar 31, 2025
2023Apr 1, 2024

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.