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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | NOTE 4 — STOCK-BASED COMPENSATION The Company has three equity incentive plans: the 2015 Stock Option Plan, as amended (the “2015 Plan”), the 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), and the Non-Employee Director Compensation Plan. The Company has also issued restricted stock as employment inducement awards to its Chief Executive Officer. As of December 31, 2022, there were options to purchase 2,560,000 shares of the Company’s common stock outstanding to certain executives, key employees and consultants under the 2015 Plan, of which 445,000 were issued during the twelve months ended December 31, 2022. Additional options may be issued under the 2015 Plan as outstanding options are forfeited, subject to a maximum 6,000,000 available for issuance under the 2015 Plan. The 2021 Plan provides for the grant of up to 1,000,000 incentive stock options, nonqualified stock options, stock awards, restricted stock awards, restricted stock units and/or stock appreciation rights to employees, consultants and directors. During the twelve months ended December 31, 2022, there were issued 97,100 shares of common stock, as director compensation and 475,000 options to purchase shares of common stock as executive compensation under the 2021 Plan. Effective January 1, 2021, each non-employee director of the Company (other than the Chairman of the Board) and Board advisor were eligible to receive of $75,000 annually, to be paid quarterly $12,500 in cash and $6,250 in common stock. The Chairman of the Board is eligible to receive $100,000 annually, to be paid quarterly $12,500 in cash and $12,500 in common stock. Effective May 18, 2021, each non-employee director of the Company (other than the Chairman of the Board) and Board advisor are eligible to receive of $110,000 annually, to be paid quarterly $12,500 in cash and $15,000 in common stock. The Chairman of the Board is eligible to receive $140,000 annually, to be paid quarterly $12,500 in cash and $22,500 in common stock. From May 18, 2021 to May 6, 2022, non-employee director compensation was paid pursuant to the 2021 Plan. Since May 6, 2022, non-employee director compensation has been paid pursuant to the Non-Employee Director Compensation Plan. All payments were and are pro-rated for partial service. On April 12, 2021, pursuant to an employment agreement entered into on March 15, 2021, with Linda Tharby, the Company’s President and Chief Executive Officer, the Company issued three restricted stock awards for an aggregate 1,000,000 shares of common stock for an aggregate stock price of $3,310,000 and each vesting subject to employment on the respective vesting date. These awards were issued as an inducement employment. 2015 STOCK OPTION PLAN, as amended Time-Based Stock Options The per share weighted average fair value of stock options granted during the years ended December 31, 2022, and December 31, 2021 was $1.98 and $2.85, respectively. The fair value of each award is estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the years ended December 31, 2022, and December 31, 2021. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of the U.S. Treasury issues with a term equal to the expected life of the option being valued. The following table summarizes the assumptions used in determining fair value. These assumptions are subjective and generally require significant analysis and judgment to develop. We have recognized tax benefits associated with stock-based compensation of $198,258 and $175,257 for the years ended December 31, 2022 and 2021, respectively. Schedule of time based stock options
|  | December 31, 2022 |  | December 31, 2021 |
Dividend yield |  |  | 0.00% |  |  | 0.00% |
Expected volatility |  |  | 65.29% – 77.5% |  |  | 74.01 – 77.91% |
Weighted-average volatility |  |  | — |  |  | — |
Expected dividends |  |  | — |  |  | — |
Expected term (in years) |  |  | 10 Years |  |  | 10 Years |
Risk-free rate |  |  | 1.81 – 4.02% |  |  | 1.20 – 1.62% |
The following table summarizes the status of the Company’s stock option plan: Schedule of status of time based stock options
|  | December 31, 2022 |  | December 31, 2021 |
|  | Shares |  | Weighted Average Exercise Price |  | Shares |  | Weighted Average Exercise Price |
Outstanding at January 1 |  |  | 3,672,500 |  | $ | 3.42 |  |  | 2,922,494 |  | $ | 2.46 |
Granted |  |  | 445,000 |  | $ | 2.57 |  |  | 2,000,000 |  | $ | 3.64 |
Exercised |  |  | 1,031,250 |  | $ | 1.57 |  |  | 1,062,500 |  | $ | 1.19 |
Forfeited |  |  | 526,250 |  | $ | 2.73 |  |  | 187,494 |  | $ | 3.36 |
Outstanding at year end |  |  | 2,560,000 |  | $ | 4.15 |  |  | 3,672,500 |  | $ | 3.42 |
Options exercisable |  |  | 737,500 |  | $ | 4.93 |  |  | 983,750 |  | $ | 2.73 |
Weighted average fair value of options granted during the period |  |  | — |  | $ | 1.98 |  |  | — |  | $ | 2.85 |
Stock-based compensation expense |  |  | — |  | $ | 1,925,861 |  |  | — |  | $ | 2,457,788 |
Total stock-based compensation expense, net of forfeitures, for stock option awards totaled $1,925,861 and $2,457,788 for the years ended December 31, 2022, and 2021, respectively. Net cash received from option exercises for the years ended December 31, 2022, and 2021 was $406,623 and $1,261,251, respectively. We have recognized tax benefits associated with options exercised of 103,319 and $665,700 for the years ended December 31, 2022 and 2021, respectively. The weighted-average grant-date fair value of options granted during the years ended December 31, 2022, and 2021, was $881,428 and $5,699,986, respectively. The total intrinsic value of options exercised during the years ended December 31, 2022, and 2021, was $1,150,203 and $697,920, respectively. The following table presents information pertaining to options outstanding as of December 31, 2022: Schedule of information pertaining to options outstanding
Range of Exercise Price |  | Number Outstanding |  | Weighted Average Remaining Contractual Life |  | Weighted Average Exercise Price |  | Number Exercisable |  | Weighted Average Exercise Price |
$2.25 - $9.49 |  | 2,560,000 |  | 8.8 years |  | $ | 4.15 |  | 737,500 |  | $ | 4.93 |
As of December 31, 2022, there was $4,299,070 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2015 Plan. That cost is expected to be recognized over a weighted-average period of 45 months. The total fair value of shares vested was $2,703,002 and $1,923,179 at December 31, 2022, and December 31, 2021, respectively. 2021 STOCK OPTION PLAN, as amended Time Based Stock Options The per share weighted average fair value of stock options granted during the years ended December 31, 2022 and December 31, 2021 was $1.99 and $0 respectively. The fair value of each award is estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the years ended December 31, 2022 and December 31, 2021. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of the U.S. Treasury issues with a term equal to the expected life of the option being valued. We have recognized tax benefits associated with stock-based compensation of $33,083 and $0 for the years ended December 31, 2022 and 2021, respectively. Schedule of time based stock options
|  | December 31, |
|  | 2022 |  | 2021 |
Dividend yield |  |  | 0.00% |  |  | 0.00% |
Expected Volatility |  |  | 65.9% |  |  | 0% – 0% |
Weighted-average volatility |  |  | — |  |  | — |
Expected dividends |  |  | — |  |  | — |
Expected term (in years) |  |  | 10 |  |  | 0 |
Risk-free rate |  |  | 2.99% |  |  | 0% – 0% |
The following table summarizes the status of the 2021 Plan with respect to time based stock options: Schedule of status of time based stock options
|  | Year Ended December 31, |
|  | 2022 |  | 2021 |
|  | Shares |  | Weighted Average Exercise Price |  | Shares |  | Weighted Average Exercise Price |
Outstanding at January 1 |  | 0 |  | $ | 0 |  |  | — |  | $ | — |
Granted |  | 475,000 |  | $ | 2.67 |  |  | — |  | $ | — |
Exercised |  | 0 |  | $ | — |  |  | — |  | $ | — |
Forfeited |  | 0 |  | $ | — |  |  | — |  | $ | — |
Outstanding at year end |  | 475,000 |  | $ | 2.67 |  |  | — |  | $ | — |
Options exercisable |  | 0 |  | $ | — |  |  | — |  | $ | — |
Weighted average fair value of options granted during the period |  | — |  | $ | 1.99 |  |  | — |  | $ | — |
Stock-based compensation expense |  | — |  | $ | 157,536 |  |  | — |  | $ | — |
Total stock-based compensation expense was $157,536 and $0 for the years ended December 31, 2022, and 2021, respectively. There were no options exercised during the years ended December 31, 2022 and December 31, 2021. The weighted-average grant-date fair value of options granted during the years ended December 31, 2022, and 2021 was $945,215 and $0, respectively. The following table presents information pertaining to options outstanding at December 31, 2022: Schedule of information pertaining to options outstanding
Range of Exercise Price |  | Number Outstanding |  | Weighted Average Remaining Contractual Life |  | Weighted Average Exercise Price |  | Number Exercisable |  | Weighted Average Exercise Price |
$2.67 |  | 475,000 |  | 9.3 years |  | $ | 2.67 |  | 0 |  | $ | 0 |
As of December 31, 2022, there was $787,679 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 48 months. The total fair value of shares vested as of December 31, 2022, and December 31, 2021, was zero and zero, respectively. Performance-Based Stock Options There were no performance-based stock options granted during the twelve months ended December 31, 2022, and 2021. The following table summarizes the status of the 2015 Plan with respect to performance-based stock options as of December 31, 2022 and 2021: Schedule of performance base options outstanding
|  | December 31, 2022 |  |  | December 31, 2021 |
|  | Shares |  | Weighted Average Exercise Price |  |  | Shares |  | Weighted Average Exercise Price |
Outstanding at January 1 |  | — |  | $ | — |  |  |  | 1,000,000 |  | $ | 1.70 |
Granted |  | — |  | $ | — |  |  |  | — |  | $ | — |
Exercised |  | — |  | $ | — |  |  |  | — |  | $ | — |
Forfeited |  | — |  | $ | — |  |  |  | — |  | $ | — |
Outstanding at year end |  | — |  | $ | — |  |  |  | 1,000,000 |  | $ | 1.70 |
Options exercisable |  | — |  | $ | — |  |  |  | — |  | $ | — |
Weighted average fair value of options granted during the period |  | — |  | $ | — |  |  |  | — |  | $ | — |
Stock-based compensation expense |  | — |  | $ | — |  |  |  | — |  | $ | (408,747 | )
Total performance stock-based compensation expense totaled zero and $(408,747) for the years ended December 2022 and 2021, respectively. All performance-based stock options were forfeited as of December 31, 2021, and there was no unrecognized compensation cost remaining. RESTRICTED STOCK AWARDS On April 12, 2021, pursuant to an employment agreement entered into on March 15, 2021, with Linda Tharby, the Company’s President and Chief Executive Officer and as an inducement to her employment, the Company issued three restricted stock awards for an aggregate 1,000,000 shares of common stock for an aggregate stock price of $3,310,000 and each vesting subject to employment on the respective vesting date. The following table summarizes the activities for our unvested restricted stock awards for the twelve months ended December 31, 2022, and 2021. The following table summarizes the activities for our unvested restricted stock awards for the twelve months ended December 31, 2022, and 2021.
|  | Twelve Months Ended December 31, |
|  | 2022 |  | 2021 |
|  | Shares |  | Weighted Average Grant-Date Fair Value |  | Shares |  | Weighted Average Grant-Date Fair Value |
Unvested at January 1 |  | 1,000,000 |  | $ | 3.01 |  | — |  | $ | — |
Granted |  | — |  | $ | — |  | 1,000,000 |  | $ | 3.01 |
Vested |  | 50,000 |  | $ | 3.31 |  | — |  | $ | — |
Forfeited/canceled |  | — |  | $ | — |  | — |  | $ | — |
Unvested at December 31 |  | 950,000 |  | $ | 3.04 |  | 1,000,000 |  | $ | 3.01 |
As of December 31, 2022, there was $1,618,177 of unrecognized compensation cost related to unvested employee restricted shares. This amount is expected to be recognized over a weighted-average period of 21 months. We have recognized tax benefits associated with restricted stock award compensation of $101,419 and $47,220 for the twelve months ended December 31, 2022 and 2021, respectively.

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