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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2022
STOCK-BASED COMPENSATION [Abstract] |
STOCK-BASED COMPENSATION |
Note 12 | STOCK-BASED COMPENSATION
Restricted Stock Awards and Restricted Stock Units Unvested equity interests of MOR were converted into restricted Company common stock based upon the exchange ratio of 1.7776 shares of Company common stock for each 1 MOR unit, subject to any adjustments required under the Contribution Agreement. The information regarding the 2020 Plan below is presented as though the combination occurred as of the beginning of the periods presented.
|  | Number of Restricted Shares and Units |  |  | Weighted Average Grant Date Fair Value Per Share |
Unvested at January 1, 2021 |  |  | 1,699,676 |  |  | $ | 1.28 |
Issued |  |  | 454,000 |  |  |  | 11.71 |
Vested |  |  | (907,545 | ) |  |  | 0.03 |
Canceled |  |  | (100,000 | ) |  |  | 12.18 |
Unvested at December 31, 2021 |  |  | 1,146,131 |  |  |  | 3.28 |
Issued |  |  | — |  |  |  | — |
Vested |  |  | (349,478 | ) |  |  | 2.05 |
Canceled |  |  | (115,105 | ) |  |  | 0.21 |
Unvested at September 30, 2022 |  |  | 681,548 |  |  | $ | 4.45 |
The 681,548 of unvested awards at September 30, 2022 consists of 263,000 restricted stock units and 418,548 shares of restricted stock. Stock Options As part of the Merger (see Note 4), the Company assumed the Helix TCS, Inc. Omnibus Stock Incentive Plan and the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan, each as amended, pursuant to which options exercisable at prices between $2.00 and $51.80 per share for 455,089 shares of Company common stock were outstanding. The value attributable to service subsequent to the Merger will be recognized as compensation cost by the Company. The fair value of the stock options was estimated using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgement. The assumptions at September 30, 2022 and December 31, 2021 are as follows:
|  | September 30, 2022 |  |  | December 31, 2021 |
Exercise Price |  | $ | 2.00 to $51.80 |  |  | $ | 2.00 to $51.80 |
Fair value of Company common stock |  | $ | 2.98 - $15.61 |  |  | $ | 7.85 to $22.90 |
Dividend yield |  |  | 0% |  |  |  | 0% |
Expected volatility |  |  | 117% to 188% |  |  |  | 117% to 188% |
Risk Free interest rate |  | 0.27% to 2.96% |  |  |  | 0.27% to 1.59% |
Expected life (years) remaining |  | 0.09 to 9.87 |  |  |  | 0.84 to 10.00 |
Stock option activity for the period ended September 30, 2022 is as follows:
|  | Shares Underlying Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (in years) |
Outstanding at January 1, 2021 |  |  | — |  |  | $ | — |  |  |  | — |
Options assumed in Helix Merger |  |  | 455,089 |  |  | $ | 15.13 |  |  |  | 3.24 |
Granted |  |  | 3,893,714 |  |  | $ | 12.73 |  |  |  | 9.31 |
Exercised |  |  | (29,937 | ) |  | $ | 6.03 |  |  |  | 1.02 |
Forfeited and expired |  |  | (271,893 | ) |  | $ | 7.31 |  |  |  | 6.65 |
Outstanding at December 31, 2021 |  |  | 4,046,973 |  |  | $ | 14.25 |  |  |  | 8.75 |
Granted |  |  | 1,203,250 |  |  | $ | 4.02 |  |  |  | 9.58 |
Exercised |  |  | (33,334 | ) |  | $ | 2.47 |  |  |  | 2.80 |
Forfeited and expired |  |  | (1,027,181 | ) |  | $ | 14.69 |  |  |  | 8.28 |
Outstanding at September 30, 2022 |  |  | 4,189,708 |  |  | $ | 10.49 |  |  |  | 8.54 |
Vested options at September 30, 2022 |  |  | 1,475,670 |  |  | $ | 11.36 |  |  |  | 7.58 |
The weighted average exercise price and remaining contractual life of exercisable options as of September 30, 2022 is $11.36 and 7.58 years, respectively. The total aggregate intrinsic value of the exercisable options as of September 30, 2022 was approximately $51,911. Stock Compensation Expense The grant date fair value per share for the stock options granted was $3.66 and $11.94 for the nine months ended September 30, 2022 and 2021, respectively. On March 2, 2022, the Company and the former chief executive officer and the former chief financial officer of Helix mutually agreed not to renew special advisor agreements between the advisors and the Company. Per the terms of the agreements, options to purchase 366,166 shares of common stock will continue to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors are not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, the Company recorded $5,417,043 of stock compensation expenses related to the options that will vest over the twelve months ending March 2, 2023 during March 2022. At September 30, 2022, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $17,781,687, which the Company expects to recognize over a weighted-average period of approximately 2.94 years. Stock compensation expense for the three and nine months ended September 30, 2022 and 2021 is as follows:
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Services |  | $ | 42,768 |  |  | $ | 14,823 |  |  | $ | 107,928 |  |  | $ | 19,479 |
Research and development |  |  | 118,822 |  |  |  | (131,774 | ) |  |  | 348,788 |  |  |  | 6,215 |
Sales and marketing |  |  | 196,724 |  |  |  | 108,477 |  |  |  | 439,343 |  |  |  | 315,140 |
General and administrative |  |  | 1,604,930 |  |  |  | 2,635,980 |  |  |  | 5,320,920 |  |  |  | 5,904,845 |
Separation expenses |  |  | — |  |  |  | — |  |  |  | 5,417,043 |  |  |  | — |
Total |  | $ | 1,963,244 |  |  | $ | 2,627,506 |  |  | $ | 11,634,022 |  |  | $ | 6,245,679 |
Total intrinsic value of options exercised in the period ended September 30, 2022 was $26,472. The total fair value of restricted shares vested during the period ended September 30, 2022 was $1,959,295.

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