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Stock Options

9 Months Ended

Sep. 30, 2022

13. Stock Options

In September 2022, the board granted 165,000 stock options to officers, board members, and employees. These options vested immediately and are exercisable at $5.25 for 3 years. Total stock-based compensation recognized on these options was $505,476 and was recognized in management, professional services, and general administrative expenses in the statement of operations. In September 2022, the board granted an additional 15,000 total stock options, 7,500 each to our independent board members. These options vested immediately and are exercisable at $4.75 for 3 years. Total stock-based compensation recognized on these options was $41,799 and was recognized in management expenses in the statement of operations.

In February 2021, the board granted 283,936 stock options to officers, board members, and employees. These options vested immediately and are exercisable at $5.60 for 3 years. Total stock-based compensation recognized on these options was $604,571 and was recognized in management, professional services, and general administrative expenses in the statement of operations. In March 2021, the Company granted 3,572 stock options to an individual for services rendered to the Company. These options vested immediately and are exercisable at $5.60 for 3 years. Total stock-based compensation recognized on these options was $9,860 and was recognized in general administrative expenses in the statement of operations. The fair value of stock option awards granted, and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follows:

	February 11, 2021			March 15, 2021			September 6, 2022			September 28, 2022
Fair value	$	604,572		$	9,860		$	505,476		$	41,799
Options issued		283,936			3,572			165,000			15,000
Exercise price	$	5.60		$	5.60		$	5.25		$	4.75
Expected term (in years)		3.0			3.0			3.0			3.0
Risk-free rate		0.19	%		0.33	%		3.55	%		4.12	%
Volatility		97.9	%		99.3	%		89.3	%		89.2	%

Activity in the Company’s stock options is as follows:

	Number of Options			Weighted Average Exercise Prices
Balance December 31, 2020		150,000		$	1.83
Granted		469,674		$	5.53
Exercised		(101,786	)	$	1.87
Forfeited		(10,713	)	$	5.60
Balance December 31, 2021		507,175		$	5.25
Granted		180,000		$	5.21
Exercised		(116,078	)	$	4.31
Expired		(7,143		$	1.96
Forfeited		(21,429	)	$	5.60
Balance September 30, 2022		542,525		$	5.47
Outstanding and exercisable at September 30, 2022		542,525		$	5.47

At September 30, 2022, outstanding stock options have a weighted average remaining term of approximately 2 years and have no intrinsic value. Intrinsic value of the options exercised for the three and nine-month periods ended September 30, 2022, was $46,500 and $302,493, respectively. Intrinsic value of the options exercised for the nine-month period ended September 30, 2021 was $164,000, none were issued in the three month period ending September 30, 2021.