The Company granted options to acquire 108,040 shares of Common Stock of the Company at weighted average exercise price of $8.10 per share during the nine months ended September 30, 2024. Generally, options have a service vesting condition of 25% cliff after 1 year and then monthly thereafter for 36 months (2.067% per month).

The following table provides the estimates included in the inputs to the Black-Scholes pricing model for the options granted:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)
Outstanding as of December 31, 2023	2,430,900	$	4.19	$	—	—
Granted	108,040	$	8.10	$	4.18	—
Forfeited	(1,104,710)	$	3.75	$	—	—
Exercised	(47,830)	$	0.38	$	—	—
Outstanding as of September 30, 2024	1,386,400	$	4.90	$	2.58	8.59
Vested and expected to vest as of September 30, 2024	1,386,400	$	4.90	$	2.58	8.59
Exercisable as of September 30, 2024	884,634	$	4.38	$	2.23	8.51

The aggregate intrinsic value of options outstanding and options exercisable as of September 30, 2024 was $102,132 and $68,707, respectively. At September 30, 2024, future stock-based compensation for options granted and outstanding of $1,334,135 will be recognized over a remaining weighted-average requisite service period of 2.67 years.

The Company recorded stock-based compensation expense related to options of $294,654 and $385,056 in the three months ended September 30, 2024 and 2023, respectively, to the accompanying unaudited condensed consolidated statements of operations. The Company recorded stock-based compensation expense related to options of $993,244 and $2,854,028 in the nine months ended September 30, 2024 and 2023, respectively, to the accompanying unaudited condensed consolidated statements of operations.

There were 3,750,000 warrants granted to AFG during the nine months ended September 30, 2024 at an exercise price of $10.00 and a fair value of $2.52 per warrant (Note J).

There were 84,525 warrants exercised in the nine months ended September 30, 2024 at a weighted average exercise price of $1.31 per share. As of September 30, 2024, there were 955,359 warrants outstanding at a weighted average exercise price of $3.20 per share, with expiration dates ranging from 2028 to 2033. The Company recorded $58,275 and $1,873,771 stock-based compensation expense related to warrants for the three and nine months ended September 30, 2023. There was no such expense during the three and nine months ended September 30, 2024.

The following table provides the estimates included in the inputs to the Black-Scholes pricing model for the AFG and compensatory warrants granted:


	Nine Months Ended September 30,
	2024		2023
Expected term	3 years		10 years
Risk-free interest rate	4.46	%	3.53	%
Dividend yield	0.00	%	0.00	%
Volatility	55.14	%	47.44	%

The Company has recorded stock-based compensation related to its options and warrants in the accompanying unaudited condensed consolidated statements of operations as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
General and administrative	$	279,395	$	420,856	$	772,831	$	4,705,324
Research and development	15,259		22,475		220,413		22,475
	$	294,654	$	443,331	$	993,244	$	4,727,799

Stock-based compensation capitalized as part of capitalized software costs for the three and nine months ended September 30, 2024 were $15,259 and $220,413, respectively, which is in addition to amounts included in the table above. Stock-based compensation capitalized as part of capitalized software costs for the nine months ended September 30, 2023 were $20,745.

During the nine months ended September 30, 2024, the Company issued 417,376 restricted share awards to certain of its directors and officers. Of the restricted share awards granted, 381,915 shares vested immediately upon grant, while 35,461 shares vested in the third quarter of 2024. The fair value of a restricted share award is equal to the fair market value price of the Company's Common Stock on the date of grant. The Company recorded stock-based compensation expense of $25,000 and $588,500, respectively, for the three and nine months ended September 30, 2024 related to these restricted share awards.


	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2024	—	$	—
Granted	417,376	$	1.41
Vested	(417,376)	$	1.41
Nonvested at September 30, 2024	—	$	—