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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

5. Stock-Based Compensation

 

Invizyne’s 2020 Equity Incentive Plan (the “2020 Plan”), which was approved by the Invizyne shareholders, permits grants to its officers, directors, and employees for up to 903,780 shares of Invizyne’s common stock. The 2020 Plan authorizes the use of stock options, shares of restricted stock, and restricted stock units.

 

On February 1, 2021, stock options to purchase 513,750 shares of common stock were granted at an exercise price of $2.53 per share, which was equal to the fair value of the common stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. The inputs used to determine the fair value was common stock price of $2.53, option exercise price of $2.53, expected life in years of 5 years, with a contract life of 7 years, risk-free rate of 0.42%, expected annual volatility of 123.04%, and annual rate of dividends of $0. On May 1, 2023, stock options to purchase 50,000 shares of common stock were granted at an exercise price of $3.44 per share, which was equal to the fair value of the common stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. The inputs used to determine the fair value was common stock price of $3.44, option exercise price of $3.44, expected life in years of 5 years, with a contract life of 7 years, risk-free rate of 3.64%, expected annual volatility of 121.70%, and annual rate of dividends of $0. As of September 30, 2023, stock options to purchase 278,165 shares of common stock have vested, the weighted average exercise price is $2.54, the aggregate intrinsic value is $0.00, and the weighted average remaining contractual term is 4.54 years. Invizyne stock-based compensation were $61,336 and $54,087 for the three ended September 30, 2023 and 2022, respectively. Invizyne stock-based compensation were $174,413 and $164,228 for the nine months ended September 30, 2023 and 2022. As of September 30, 2023, the unrecognized stock-based compensation is $637,862.

 

A summary of stock option activity during the nine months ended September 30, 2023 and 2022 is presented below:

 

Schedule of stock option activity

   Number of Shares  

Weighted Average

Exercise Price

   Weighted Average Remaining Contractual Life (in Years) 
Stock options outstanding at January 1, 2022   513,750    2.53    6.08 
Granted   -    -    - 
Exercised   -    -    - 
Expired   -    -    - 
Stock options outstanding at September 30, 2022   513,750    2.53    5.58 
Granted   -    -    - 
Exercised   -    -    - 
Expired   -    -    - 
Stock options outstanding at December 31, 2022   513,750   $2.53    5.08 
Granted   50,000    3.44    6.84 
Exercised   -    -    - 
Expired   -    -    - 
Stock options outstanding at September 30, 2023   563,750   $2.61    4.54 
                
Stock options exercisable at September 30, 2022   171,249   $2.53    5.34 
Stock options exercisable at September 30, 2023   278,165   $2.54    4.37 

 

On July 19, 2021, Invizyne granted 79,052 restricted stock units (“RSUs”) at a value of $2.53 per share. These RSUs were issued in 2020 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up subsequent to an initial public offering of the company, or upon the change of control of the Company by Invizyne, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period subsequent to an initial public offering, or upon the change of control of Invizyne. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest.

 

On March 28, 2022, Invizyne granted 232,689 restricted stock units (“RSUs”) at a value of $2.53 per share. These RSUs were issued in 2021 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up subsequent to an initial public offering of the Company, or upon the change of control of the Company by Invizyne, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period subsequent to an initial public offering, or upon the change of control of Invizyne. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest, and the unrecognized stock-based compensation is $788,705.

 

On May 1, 2023, Invizyne granted 97,050 restricted stock units (“RSUs”) at a value of $3.44 per share. These RSUs were issued in 2023 in lieu of cash bonuses. As these RSUs do not vest until the expiration of any lock up subsequent to an initial public offering of the Company, or upon the change of control of the Company by Invizyne, which is outside of the control of the Company, no compensation expense related to these RSUs has been recorded. These RSUs fully vest upon the expiration of any lockup period subsequent to an initial public offering, or upon the change of control of Invizyne. The Company will record stock-based compensation for these RSUs when the RSUs begin to vest, and the unrecognized stock-based compensation is $333,852.

 

 

Between April 19, 2022 and September 21, 2022, the Company granted 3,675,000 restricted stock units (“RSUs”). These units will vest when 20% of the one-half of the total number of RSUs, by each individual person, on the thirteenth (13) month anniversary of the listing of the Class A Shares on a United States national exchange, then at a rate of 10% of one-half the number of RSUs each nine months after the date of the initial vesting, until the last vesting on the fifth year anniversary of the Date of Grant, at which any previously unvested will fully vest. These RSUs were granted to officers, directors, employees, and contractors. As these RSUs do not begin to vest until the completion of an initial public offering by the Company, which occurred on September 20, 2023, $201,370 of stock-based compensation expense related to these RSUs was recorded for the three and nine months ended September 30, 2023. The total unrecognized compensation expense based on the shares price sold in the private placement is $36,548,630.

 

On April 19, 2022 the Company granted 2,000,000 restricted stock units (“RSUs”). These units will vest when 20% of the one-half of the total number of RSUs, by each individual person, on the thirteenth (13) month anniversary of the listing of the Class A Shares on a United States national exchange. Class A Share have traded in the market since September 20, 2023. The RSUs will vest once the Class A Shares are listed for any 90 consecutive calendar days at an average price of $20.00 or more during the period commencing from the Date of Grant and prior to the five year anniversary of the Date of Grant, with an average monthly trading volume of 2,000,000 Class A Shares or more during the 90 consecutive calendar day period, or the Class A Shares are listed for any 90 consecutive calendar days at an average price of $25.00 or more during the period commencing the Date of Grant and prior to the five year anniversary of the Date of Grant; provided further, that if there is a distribution of cash, stock or other property by the Company on the Class A Shares, then the foregoing average amounts of $20.00 or $25.00 will be reduced, from time to time, by the value of any one or more per share distributions after the Date of Grant until vested. As these RSUs do not begin to vest until the completion of an initial public offering by the Company, which occurred on September 20, 2023, $86,685 of stock-based compensation expense related to these RSUs was recorded for the three and nine months ended September 30, 2023. The estimated unrecognized compensation expense for performance/market vesting RSUs is $15,733,315. A summary of restricted stock unit activity during the nine-months ended September 30, 2023 and 2022 is presented below:

 

   Time-Based   Performance-Based 
   Number of Restricted Stock Units   Weighted Average Grant Date Fair Value   Number of Restricted Stock Units   Weighted Average Grant Date Fair Value 
Restricted stock units outstanding at September 30, 2022   3,675,000   $10.00    2,000,000   $7.91 
Granted   -    -    -    - 
Exercised   -    -    -    - 
Expired   -    -    -    - 
Restricted stock units outstanding at December 31, 2022   3,675,000   $10.00    2,000,000   $7.91 
Granted   -    -    -    - 
Exercised   -    -    -    - 
Expired   -    -    -    - 
Restricted stock units outstanding at September 30, 2023   3,675,000   $10.00    2,000,000   $7.91 
                     
Restricted stock units at September 30, 2022   -   $-    -   $- 
Restricted stock units at September 30, 2023   -   $-    -   $-