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Stock Compensation Plan | 6 Months Ended
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Jun. 30, 2023
Stock Compensation Plan |
Stock Compensation Plan | 10. Stock Compensation Plan Equity Incentive Plan In October 2021, the Company adopted the 2021 Stock Incentive Plan (“2021 Plan”) that provided for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2021 Plan provided for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2021 Plan is ten years. The maximum number of shares initially available for issuance under the 2021 Plan was 6,000,000. No further options are available to be issued under the 2021 Plan. In November 2022, the Company adopted the 2022 Equity Incentive Plan (“2022 Plan”) that provides for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2022 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2022 Plan is ten years. The number of shares of the Company’s common stock initially reserved for issuance under the 2022 Plan is equal to 5,000,000, subject to an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2023 and continuing until, and including, the fiscal year ending December 31, 2033, equal to the lesser of 5% of the number of shares of the Company’s common stock outstanding on such date or an amount determined by the Company’s board of directors. As of June 30, 2023, 988,606 shares remain available for future grant under the Plan. Stock Options The following table sets forth the activity for the Company’s stock options during the periods presented:
|  | Number of Options |  |  | Weighted- Average Exercise Price per Share |  |  | Weighted Average Remaining Contractual Term (in Years) |  |  | Aggregate Intrinsic Value |
Outstanding as of December 31, 2022 |  |  | 2,901,000 |  |  | $ | 1.91 |  |  |  | 9.4 |  |  | $ | 199,500 |
Granted |  |  | - |  |  | $ | - |  |  |  |  |  |  |  |  |
Forfeited |  |  | (50,000 | ) |  | $ | 0.25 |  |  |  |  |  |  |  |  |
Outstanding as of June 30, 2023 |  |  | 2,851,000 |  |  | $ | 1.91 |  |  |  | 8.9 |  |  | $ | 47,700 |
Exercisable as of June 30, 2023 |  |  | 1,285,025 |  |  | $ | 1.89 |  |  |  | 8.8 |  |  | $ | 26,500 |
Vested or expected to vest as of June 30, 2023 |  |  | 2,851,000 |  |  | $ | 1.91 |  |  |  | 8.9 |  |  | $ | 47,700 |
For the six months ended June 30, 2023, no options were granted. For the six months ended June 30, 2022, the Company granted 2,116,000 options with an exercise price of $2.00 per share that vest monthly over one to three years. The weighted-average grant date fair value of options granted for the six months ended June 30, 2022 was $1.17. The Company recorded stock compensation from options of $209,774 and $189,980 for the three months ended June 30, 2023 and 2022, respectively. The Company recorded stock compensation from options of $565,985 and $198,283 for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, there was $1,736,708 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan, which is expected to be recognized over a weighted average period of approximately 1.7 years. Stock Awards In October 2021, the Company issued 1,500,000 shares of restricted common stock to its Chief Executive Officer. The number of shares that vest is dependent on achieving certain performance conditions and dependent market conditions upon the third anniversary from the date of grant. The Company determined that the fair value of this award was $0.25 per share for a total value of $375,000. Upon reaching the performance condition, the Company will recognize stock compensation expense over the remaining measurement period. No stock compensation was recorded for this award for the three and six months ended June 30, 2023 and 2022. In October 2021, the Company issued 600,000 shares of restricted common stock to a consultant who is also a member of the board of directors, that vest annually over three years. The Company determined that the fair value of this award was $0.25 per share for a total value of $150,000. The consulting agreement also included future awards of common stock for continued service, however in March 2023, the consulting agreement was amended and these future awards were cancelled. In July 2022, the Company issued 600,000 shares of restricted common stock to a consultant who is also a member the of board of directors, that vest quarterly over one year. The Company determined that the fair value of this award was $2.00 per share for a total value of $1,200,000. In July 2022, the Company issued 100,000 shares of restricted common stock to a consultant, that vests on the one-year anniversary of the grant. The Company determined that the fair value of this award was $2.00 per share for a total value of $200,000. In November 2022, the Company issued 3,000,000 shares of restricted common stock to certain employees and directors, that vest two to four years from the date of the grant. The Company determined that the fair value of these awards was $2.63 per share for a total value of $7,890,000. In December 2022, the Company issued an aggregate of 1,550,000 shares of restricted common stock to its Chief Executive Officer and Chairman, Interim Chief Financial Officer and a director that vest quarterly over one year from the date of the grant. The Company determined that the fair value of these awards was $1.58 per share for a total value of $2,449,000. In March 2023, the Company issued an aggregate of 1,256,750 shares of restricted common stock to its Chief Executive Officer and Chairman and a director that vests quarterly over one year from the date of the grant. The Company determined that the fair value of these awards was $1.80 per share for a total value of $2,262,150. The Company recorded stock compensation from stock awards totaling $2,164,913 and $12,500 for the three months ended June 30, 2023 and 2022, respectively. The Company recorded stock compensation from stock awards totaling $3,952,800 and $25,000 for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, there is $11,279,197 of unrecognized compensation cost related to the non-vested portion of stock awards that is expected to be recognized over the next 1.7 years. The following table summarizes vesting of restricted common stock:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value Per Share |
Unvested as of December 31, 2022 |  |  | 7,000,000 |  |  | $ | 1.75 |
Granted |  |  | 1,256,750 |  |  | $ | 1.80 |
Vested |  |  | (1,389,188 | ) |  | $ | 1.72 |
Unvested as of June 30, 2023 |  |  | 6,867,562 |  |  | $ | 1.66 |
Stock-based Compensation Expense Stock-based compensation expense for all stock awards recognized in the accompanying consolidated statements of operations is as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
General and administrative |  | $ | 2,281,277 |  |  | $ | 187,057 |  |  | $ | 4,332,985 |  |  | $ | 207,860 |
Research and development |  |  | 93,409 |  |  |  | 23,688 |  |  |  | 185,800 |  |  |  | 23,688 |
Total |  | $ | 2,374,686 |  |  | $ | 210,745 |  |  | $ | 4,518,785 |  |  | $ | 231,548 |

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