Effective March 23, 2016, the Company adopted the 2016 Omnibus Incentive Plan (the “Omnibus Plan”) and the 2016 Non-Employee Equity Incentive Plan (the “Non-Employee Plan”), which are intended to allow the Company to compensate and retain the services of key employees, non-employees, Scientific and Clinical Advisory Board members, and outside advisors and consultants. The plans are under the administration of the Company’s Board of Directors. Under the plans, the Company, at its discretion, may grant stock option awards to certain employees and non-employees through March 23, 2026. The Omnibus Plan and the Non-Employee Plan initially provided for the grant of a total of 2,000,000 shares of common stock and 500,000 shares of common stock, respectively.

On August 13, 2017, the Company’s Board of Directors approved an amendment and restatement of the Company’s Omnibus Plan to increase the number of shares authorized for issuance under such plan by 800,000 shares, from 2,000,000 shares to 2,800,000 shares, subject to stockholder approval of such amendment within 12 months following board approval thereof. The Company’s stockholders approved the plan in December 2017. Additionally, on May 17, 2019, the Company’s Board of Directors approved Amendment No. 1 to the Omnibus Plan to increase the number of shares that may be issued as incentive stock options under the plan, which the Company’s stockholders approved on August 6, 2019. The Omnibus Plan, as amended and restated, provides that on the first day of each fiscal year of the Company during the period beginning in fiscal year ended December 31, 2018 and ending on the second day of fiscal year ending December 31, 2027, the number of shares of common stock authorized to be issued under such plan shall be increased by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available to be issued under the plan equals 20% of the number of fully diluted outstanding shares on such date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) an amount to be determined by the Company’s Board of Directors.

Pursuant to the plans, during the year ended December 31, 2022, the Company granted stock options to purchase 828,500 shares of the Company’s common stock and 0 restricted stock units, 0 shares of common stock were exercised, 308,801 shares of common stock were cancelled, and 98,335 restricted stock units were released. At December 31, 2022, stock options for 4,032,146 shares of common stock and 320,000 restricted stock units had been granted and 560,855 shares of common stock were reserved for future grants under the Omnibus Plan, and stock options for 494,600 shares of common stock had been granted and 5,400 shares of common stock were reserved for future grants under the Non-Employee Plan. In the aggregate, at December 31, 2022, stock options for a total of 4,526,746 shares of common stock and 320,000 restricted stock units had been granted and 566,255 shares of common stock were reserved for future grants. Such grants are accounted for as share-based compensation in accordance with ASC 718, Compensation - Stock Compensation, and ASC 505-50, Equity-Based Payments to Non-Employees.

For stock options requiring an assessment of value during the years ended December 31, 2022 and 2021, the fair value of each stock option award was estimated using the Black-Scholes option-pricing model utilizing the following assumptions:


	December 31,
	2022	2021
Risk-free interest rate	1.53 to 2.92%	0.61 to 1.43%
Expected dividend yield	0%	0%
Expected volatility	92.1-95.7%	92.8-100.9%
Expected life	5.5 to 6.25 years	5.5 to 6.25 years

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the stock option award; as permitted by Staff Accounting Bulletin 107, due to insufficient history of stock option activity, management has utilized the simplified approach to estimate the expected term of the stock options, which represents the period of time that stock options granted are expected to be outstanding; the expected volatility is based upon historical volatilities of comparable companies in a similar industry; and the expected dividend yield based upon the Company’s current dividend rate and future expectations.

A summary of stock option activity for the years ended December 31, 2022 and 2021 is as follows:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)
Stock options outstanding at December 31, 2020		5,030,899		$	9.10		5.51
Granted		1,251,000			13.88
Exercised		(382,219	)		6.80
Cancelled		(245,512	)		14.42
Stock options outstanding at December 31, 2021		5,654,168			10.08		5.48
Granted		828,500			6.99
Exercised		—			—
Cancelled		(308,801	)		11.32
Stock options outstanding at December 31, 2022		6,173,867			9.60		5.05
Stock options exercisable at December 31, 2022		4,397,991		$	9.04		3.74

The Company recognized, $8,649,803 and $9,588,811, in stock-based compensation during the years ended December 31, 2022 and 2021, respectively, related to stock option activity. As of December 31, 2022, total unrecognized stock-based compensation was approximately $11,743,927, which is expected to be recognized as an operating expense in the Company’s consolidated statements of operations and comprehensive loss through December 2025 or 1.94 years.

The aggregate intrinsic value of exercisable but unexercised in-the-money stock options at December 31, 2022 was approximately $4,397,991 based on a weighted average exercise price of $9.04 per share. The aggregate intrinsic value of options is calculated as the difference of the market close price of $2.85 on December 31, 2022, and the weighted average exercise price of $9.04, with a weighted average remaining contractual term of 3.74 years.

The aggregate intrinsic value of exercisable but unexercised in-the-money stock options at December 31, 2021 was approximately $14,442,527 based on a weighted average exercise price of $8.31 per share at December 31, 2021.

During the year ended December 31, 2021, the following event resulted in the amendment to terms of outstanding stock option awards:

On August 20, 2021, an employee who was employed for a particular role pursuant to an employment agreement that prescribed certain separation benefits to the employee was separated from that role. Per the employment agreement, upon termination (i) all unvested stock options would accelerate and become vested as of the termination date, and (ii) the options would remain exercisable, to the extent applicable, following the date of termination for the period prescribed in the equity award plan. As of August 20, 2021, the terminated employee held outstanding options to purchase an aggregate of 117,500 shares of the Company's common stock at a weighted average exercise price of $9.35 per share, including unvested options to purchase 52,500 shares at a weighted average exercise price of $14.98 per share. On August 20, 2021, the unvested portion of the outstanding options vested, and the post-employment option exercise period was extended from 90 days, as prescribed to the equity award plan, to 36 months from the date of the termination.

The Company calculated the change in stock-based compensation cost associated with the previously described stock option modifications pursuant to the applicable guidance in ASC 718. The change in compensation cost was determined by calculating the difference between (a) the estimated fair value of each option award immediately prior to the modifications and (b) the estimated fair value of each option award immediately after the modifications. The fair value of each option award immediately prior to and immediately after modification was estimated using the Black-Scholes option-pricing model to determine an incremental fair value, consistent with and in accordance with the Company’s existing accounting policy for

stock compensation. The total additional compensation cost associated with the previously described modifications was determined to be approximately $256,074, which was expensed in the year ended December 31, 2021.

On October 3, 2019, the Company granted 100,000 restricted stock units (“RSUs”) with time-based vesting conditions to an executive officer having an average grant date fair value of $7.53 per share. The RSUs vested in three equal installments beginning on the grant date, and annually on each anniversary of the grant date thereafter. Compensation expense is recognized on a straight-line basis.

On February 5, 2020, the Company granted 150,000 RSUs with time-based vesting conditions to an executive officer. One-half of the RSUs vested on September 30, 2021, and the balance vested on March 31, 2022. On March 31, 2020, the Company granted 50,000 RSUs with time-based vesting conditions to an executive officer. The RSUs vested in three equal installments beginning on the grant date, and annually on each anniversary of the grant date thereafter. Compensation expense is recognized on a straight-line basis.

On August 21, 2020, the Company granted 20,000 RSUs with time-based vesting conditions to an executive officer. The RSUs vest in three equal installments beginning on the grant date, and annually on each anniversary of the grant date thereafter, subject to the recipient’s continued service on each applicable vesting date. Compensation expense is recognized on a straight-line basis.

The following table summarizes the RSU activity under the Omnibus Plan for the year ending December 31, 2022:


Restricted Securities	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Nonvested balance at December 31, 2021		98,335		$	18.21
Vested/Released		(98,335	)	$	18.21
Nonvested balance at December 31, 2022		0		$	-

The Company recognized $846,073 and $1,926,773 in stock-based compensation during the years ended December 31, 2022 and 2021, respectively, related to RSU activity. As of December 31, 2022, total unrecognized stock-based compensation was $0.

Stock-based compensation for the years ended December 31, 2022 and 2021 was included in the consolidated statements of operations and comprehensive loss as follows:


	December 31,
	2022		2021
General and administrative	$	4,614,974	$	5,307,982
Research and development		4,880,902		6,207,602
Total	$	9,495,876	$	11,515,584