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Stock-Based Compensation

3 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

NOTE 9 – Stock-Based Compensation

During the three month periods ended December 31, 2021 and 2020, stock-based compensation expense was included in general and administrative and research and development costs as follows in the accompanying condensed statements of operations.

	2021		2020
General and administrative	$	163,001	$	181,792
Research and development		40,071		64,037
Total stock-based compensation expense	$	203,072	$	245,829

Stock Options

During the three month period ended December 31, 2021 and 2020, under the 2017 Equity Incentive Plan (the “2017 Plan”), the Company granted 2,000 and 41,669 stock options, respectively, to its employees and consultants. Vesting generally occurs over an immediate to 48 month period based on a time of service condition. The grant date fair value of the grants issued during the three month periods ended December 31, 2021 and 2020 was $1.72 and $1.60 per share, respectively. The total expense for the three months ended December 31, 2021 and 2020 related to stock options was $162,361 and $100,147, respectively. The total number of stock options outstanding as of December 31, 2021 and September 30, 2021 was 1,111,226 and 1,122,560, respectively.

The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three month period ended December 31, 2021 and 2020:

	2021			2020
Expected stock price volatility		56.0	%		54.3	%
Expected life of options (years)		6.0			5.8
Expected dividend yield		0	%		0	%
Risk free interest rate		1.1	%		0.5	%

During the three month periods ended December 31, 2021 and 2020, 18,843 and 71,774 stock options vested, and 13,334 and zero stock options were forfeited during these periods, respectively.

Restricted Stock Units

There were no restricted stock units (“RSUs”) granted during the three months ended December 31, 2021 and 2020, 5,644 and 8,384 RSUs vested during these periods, respectively. The total expense for the three months ended December 31, 2021 and 2020 related to these RSUs was $40,711 and $43,082, respectively. No RSUs were forfeited during the three month periods ended December 31, 2021 and 2020.

Other Stock-Based Awards

In August 2020, an additional consulting agreement was executed whereby 40,000 shares of common stock were issued, subject to Company repurchase. The stock award under the agreement vested over a six-month period. As of December 31, 2020, 26,667 shares were vested under this agreement of which 20,000 shares vested during the first quarter of fiscal year 2021. Compensation expense related to the stock awards granted under this consulting agreement amounted to $102,600 for the three month ended December 31, 2020 and was included in the total stock-based expense.

No stock-based awards were issued during the first quarter of fiscal year 2022 and no expense associated with stock awards was recorded during the three months ended December 31, 2021.

Inducement Plan

On October 4, 2021, the Company adopted the NeuroOne Medical Technologies Corporation 2021 Inducement Plan (the “Plan”), pursuant to which the Company reserved 420,350 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The Plan was approved by the Company’s Board of Directors without stockholder approval in accordance with such rule.

General

As of December 31, 2021, 673,022 shares were available in the aggregate for future issuance under the 2017 Equity Incentive Plan and Inducement Plan. No shares were available for future issuance under the 2016 Equity Incentive Plan. Unrecognized stock-based compensation was $1,473,086 as of December 31, 2021. The unrecognized share-based expense is expected to be recognized over a weighted average period of 2.7 years.