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Stock Based Compensation | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation | Stock Based Compensation The Company has a 2013 Stock Option Plan (the “2013 Plan”), which is administered by our Compensation Committee. Under the 2013 Plan, stock options to purchase shares of common stock could be granted to eligible employees, officers, directors and consultants of the Company. In 2021, the Company replaced the 2013 Plan with the 2021 Stock Incentive Plan (the “2021 Plan”), authorizing the granting of equity awards for the issuance of up to 3,000,000 shares of common stock. Upon adoption of the 2021 Plan, no more shares would be issued under the 2013 Plan. Starting on January 1, 2022, the shares authorized under the 2021 Plan shall have an annual increase of the lessor of (a) 3.5% of the aggregate number of shares of Common Stock outstanding on the final day of the preceding calendar year, or (b) such smaller amount as determined by the Board. On January 1, 2023, an additional 238,700 shares were authorized under the 2021 Plan. As of December 31, 2023, 2,837,700 shares were available for issuance under the 2021 Plan. The Company recorded total stock-based compensation in its Statements of Operations as follows (in thousands):
|  |  | Years Ended December 31,
|  |  |  |  | 2023 |  | 2022
Research and development |  |  |  |  | $ | 714 |  |  | $ | 804 |
General and administrative |  |  |  |  | 684 |  |  | 365 |
Total stock-based compensation expense |  |  |  |  | $ | 1,398 |  |  | $ | 1,169 |
Stock options The following table summarizes the range of assumptions used to estimate the fair value of stock options issued in 2023 and 2022:
| 2023 |  | 2022
Stock price | $2.82 to 6.88 |  | $4.50
Exercise price | $2.82 to 6.88 |  | $4.50
Expected volatility | 97.06 to 99.74% |  | 103.85%
Risk free interest rates | 3.87 to 4.97% |  | 3.59%
Expected term (years) | 5.75 to 6.25 |  | 3 to 4
For the years ended December 31, 2023 and 2022, a dividend yield of 0% was used because the Company has not historically paid and does not intend to pay a dividend on Common Stock in the foreseeable future. The expected stock price volatility assumption was estimated based on the historical volatilities for industry peers, as the Company had no active market for its stock prior to the IPO and limited history for issuance price of its stock. The risk-free rate assumption is determined using the yield currently available on U.S. Treasury zero coupon issues with a remaining term commensurate with the expected term of the award. The expected term of the option represents the period the options are expected to be outstanding. The following table summarizes the activity for stock options for the year ended December 31, 2023:
| Options |  | Weighted- Average Exercise Price |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022 | 1,044,250 |  | $ | 8.48 |  |  | 6.6 |  | $ | 235 |
Issued | 208,000 |  | $ | 5.25 |  |  |  |  |
Exercised | (12,500) |  | $ | 2.00 |  |  |  |  |
Forfeited and cancelled | - |  | $ | — |  |  |  |  |
Outstanding at December 31, 2023 | 1,239,750 |  | $ | 8.00 |  |  | 6.4 |  | $ | 1,865 |
Exercisable at December 31, 2023 | 850,250 |  | $ | 8.15 |  |  | 5.2 |  | $ | 1,201 |
All options expire 10 years from date of grant. Options outstanding begin to expire in August 2024. Options that were granted to employees and consultants have vesting periods that vary by award to recipient and range from immediate vesting to a period of up to 4 years. The weighted average grant date fair value of stock options issued was $4.21 and $2.96 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, total unrecognized compensation cost related to options was approximately $1,848,000 and is expected to be recognized over the remaining weighted average service period of 2.2 years. Warrants The following table summarizes the range of assumptions used to estimate the fair value of warrants issued in 2023 and 2022:
| 2023 |  | 2022
Stock price | $3.10 to $5.00 |  | $4.50
Exercise price | $6.00 to $6.25 |  | $4.50
Expected volatility | 97.06% to 103.85% |  | 103.85%
Risk free interest rates | 3.59% to 4.85% |  | 3.59%
Expected term (years) | 3 to 5 |  | 10
For the years ended December 31, 2023 and 2022, a dividend yield of 0% was used because the Company has not historically paid and does not intend to pay a dividend on Common Stock in the foreseeable future. The expected stock price volatility assumption was estimated based on the historical volatilities for industry peers, as the Company had no active market for its stock prior to the IPO and limited history for issuance price of its stock. The risk-free rate assumption is determined using the yield currently available on U.S. Treasury zero coupon issues with a remaining term commensurate with the expected term of the award. The expected term of the option represents the period the options are expected to be outstanding. The following table summarizes the activity for warrants for the year ended December 31, 2023:
| Warrants |  | Weighted- Average Exercise Price |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022 | 357,750 |  | $ | 6.00 |  |  | 4.8 |  | $ | 183 |
Issued | 459,950 |  | $ | 6.46 |  |  |  |  |
Exercised | (12,500) |  | $ | 2.00 |  |  |  |  |
Forfeited and cancelled | (3,250) |  | $ | 11.50 |  |  |  |  |
Outstanding at December 31, 2023 | 801,950 |  | $ | 6.30 |  |  | 3.9 |  | $ | 2,096 |
Exercisable at December 31, 2023 | 699,200 |  | $ | 6.26 |  |  | 3.8 |  | $ | 1,876 |
All warrants outstanding are exercisable for purchase of common stock. In connection with the IPO, 313,950 warrants were issued to the Company’s underwriters during the year ended December 31, 2023. At December 31, 2023, total unrecognized compensation cost related to warrants was approximately $282,000 and is expected to be recognized over the remaining weighted average service period of 1.4 years.

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