Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

We adopted a 2006 Stock Option and Incentive Plan, or 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 consultants. The Plan was amended at various dates by the Board of Directors to increase the reserved shares of common stock issuable under the Amended Plan to 3,838,750 as of March 31, 2022, and in June 2017 stockholders approved an amendment to extend the termination date of the Plan to January 1, 2026 and ratified 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 March 31, 2022 was 42,643.

During the three months ended March 31, 2022, we granted nonqualified options to purchase an aggregate of 726,650 shares of common stock at $1.10 per share to certain officers and employees. These options have a vesting schedule of two years and expire in ten years. The fair value of the options issued in 2022 was $304,550. 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.

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. The adoption of the 2022 Plan is subject to approval by our shareholders. As of March 31, 2022, there have been no grants issued under the 2022 Plan.

Stock option activity for the three months ended March 31, 2022 was as follows:


Common Stock Options	Number of Options	Exercise Price Per Share	Weighted Average Exercise Price		Weighted Average Remaining Life	Aggregate Intrinsic Value
Outstanding, December 31, 2021	2,386,842	$0.71-$10.33	$	1.81	7.56 years	$	731,744
Granted	726,650	$1.10-$1.13	$	1.10

Exercised	—
Canceled and forfeited	(4,525)	$1.10-$4.50	$	1.63

Outstanding, March 31 2022	3,108,967	$0.71-$10.33	$	1.64	7.90 years	$	1,751,592
Exercisable, March 31, 2022	731,592		$	3.52		$	139,485
Vested and expected to vest, March 31, 2022	2,752,361		$	1.72		$	1,509,777

Consolidated stock-based compensation expense for the three months ended March 31, 2022 and 2021 was $95,707 and $39,085, respectively. No tax benefit was recognized related to the stock-based compensation recorded during the period.

At March 31, 2022 the total compensation cost related to unvested stock option awards not yet recognized is $676,437 and this amount will be recognized over a weighted average period of 1.74 years