6. SHARE CAPITAL

Common stock

Common stock: 9,000,000 authorized; $0.001 par value. As of March 31, 2023, and December 31, 2022, there were 1,101,098 and 1,051,098 shares of common stock issued and outstanding, respectively.

Reverse Share Split

​

During March 2023, the total number of shares of common stock authorized by the Company was reduced from 180,000,000 shares of common stock, par $0.001, to 9,000,000 shares of common stock, par $0.001, and the number of shares of common stock held by each stockholder of the Company were consolidated automatically into the number of shares of common stock equal to the number of issued and outstanding shares of common stock held by each such stockholder immediately prior to the reverse split divided by twenty (20): effecting a twenty (20) old for one (1) new reverse stock split.

​

No fractional shares were issued in connection with the reverse split and all fractional shares were rounded up to the next whole share.  

​

Additionally, all options, warrants and other convertible securities of the Company outstanding immediately prior to the reverse split were adjusted by dividing the number of shares of common stock into which the options, warrants and other convertible securities are exercisable or convertible by twenty (20) and multiplying the exercise or conversion price thereof by twenty (20), all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.

​

All shares of common stock, options, warrants and other convertible securities and the corresponding price per share amounts have been presented to reflect the reverse split in all periods presented within this Form 10-Q.

​

Share Issuance

During March 2023, the Company completed a private placement for 50,000 common shares at $6.00 per common shares for gross proceeds of $300 thousand.

Stock options

On December 10, 2020, shareholders approved amendments to the Company’s stock option plan, which amended the plan previously approved on November 20, 2019 (the “Amended Stock Option Plan”).  On December 10, 2020, the Company’s shareholders approved the adoption of a new fixed equity incentive plan (the “Equity Incentive Plan”), which authorizes the Company to grant (a) stock options, (b) restricted awards, (c) performance share units, and other equity-based awards for compensation purposes (collectively, “Awards”).

​

In November 2021, the Company adopted and approved the 2021 Stock Incentive Plan and the 2021 Employee Stock Purchase Plan. The intent of the Company and the Board of Directors is that while the Amended 2020 Stock Option Plan and the 2020 Equity Incentive Plan will continue in existence in relation to the options and awards previously granted, the Board will not grant future options or awards thereunder. Instead, only the 2021 Stock Incentive Plan will be used for the grant of options and awards to eligible participants.

​

As of March 31, 2023, there was 40,940 stock options outstanding under the Amended Stock Option Plan.  No additional stock options will be issued under the Amended Stock Option Plan.  As of March 31, 2023, there was 4,000 stock options outstanding and an aggregate of 96,000 shares of common stock were available for issuance under the 2021 Stock Option Plan. As of March 31, 2023, no transactions have occurred under the 2021 Employee Stock Purchase Plan.

​

Options under the 2021 Stock Option Plan are granted from time to time at the discretion of the Board of Directors, with vesting periods and other terms as determined by the Board of Directors.

​

A summary of the stock option activity is presented below:

​

​

The following table summarizes information about stock options outstanding and exercisable under the Company’s Stock Option Plan at March 31, 2023:

​

​

The Company uses the Black-Scholes option pricing model to determine the estimated fair value of options. The fair value of each option grant is determined on the date of grant and the expense is recorded on a straight-line basis and is included as a component of general and administrative expense in the consolidated statements of operations. The assumptions used in the model include expected

life, volatility, risk-free interest rate, dividend yield and forfeiture rate. The Company’s determination of these assumptions is outlined below.

Expected life — The expected life assumption is based on an analysis of the Company’s historical employee exercise patterns.

Volatility — Volatility is calculated using the historical volatility of the Company’s common stock for a term consistent with the expected life.

Risk-free interest rate — The risk-free interest rate assumption is based on the U.S. Treasury rate for issues with remaining terms similar to the expected life of the options.

Dividend yield — Expected dividend yield is calculated based on cash dividends declared by the Board for the previous four quarters and dividing that result by the average closing price of the Company’s common stock for the quarter. The Company has not declared a dividend to date.

Forfeiture rate — The Company does not estimate a forfeiture rate at the time of the grant due to the limited number of historical forfeitures. As a result, the forfeitures are recorded at the time the grant is forfeited, which can result in negative stock based compensation expense in the period of forfeiture.

The following assumptions were used to value the awards granted during the three months ended March 31, 2022:

​

​

Stock-based compensation (benefit) expense for the three months ended March 31, 2023 and 2022 was $(10) thousand and $323 thousand, respectively. The stock-based compensation benefit for the three months ended March 31, 2023, was related to the reversal of expense due to stock option forfeitures and cancellations. As of March 31, 2023, there was approximately $1.3 million of total unrecognized compensation cost related to 10,040 unvested stock options that is expected to be recognized over a weighted-average remaining vesting period of 3.2 years.

​

Warrants

The following table details warrant activity for the three months ended March 31, 2023:

​

​

​

​

The following table summarizes warrants issued by transaction type:

​

​

​

​

​

​

​

​

​

​