Note 6 - Stock-based Compensation Expense

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

6.         Stock-Based Compensation Expense

Stock-based compensation expense related to stock options is recognized on a straight-line basis over the requisite service period for the award and is allocated to research and development expense or general and administrative expense based upon the classification of the individual to whom the award is granted.

We use the Black-Scholes model for determining the grant date fair value of our stock option grants. This model utilizes certain information, such as the interest rate on a risk-free security with a term generally equivalent to the expected life of the option being valued and requires certain other assumptions, such as the expected amount of time an option will be outstanding until it is exercised or expired, to calculate the fair value of stock options granted. The significant assumptions we used in our fair value calculations were as follows:

	2022			2021
Weighted average risk-free interest rates		3.54	%		1.43	%
Expected dividend yield		0.0	%		0.0	%
Expected life of option (in yrs)		7.0			7.0
Expected volatility		160.0	%		84.8	%

The weighted-average grant date fair values of stock options granted during 2022 and 2021 were $0.73 and $2.87, respectively. As of December 31, 2022, there is $1,449,405 of unrecognized compensation expense that will be recognized over a weighted-average period of 2.0 years.

We also have issued shares of restricted common stock to consultants and recognize the related expense over the terms of the related agreements. As of December 31, 2022, there is $24,000 recorded as a prepaid expense for these arrangements, which will be recognized as expense over the terms of the related agreements.

The following table summarizes our total stock-based compensation expense for employees, directors and consultants for the years ended December 31, 2022 and 2021:

	2022		2021
Stock options:
Research and development	$	225,031	$	96,814
General and administrative		548,346		172,613
Total stock option expense		773,377		269,427
Stock awards (consultants):
General and administrative		128,697		100,560
Total stock-based compensation expense	$	902,074	$	369,987

During September 2021, we recorded $209,825 of expense associated with the issuance of a stock purchase warrant in connection with our entering into a technology licensing agreement; such amount was recorded as research and development expense.