Stock-based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-based Compensation

Note 6. Stock-based Compensation

During the six months ended June 30, 2020, there was $1,240 in stock-based compensation associated with issued stock options included in Research and development expense. Additionally, during the same period there was $26,219 of expense associated with shares issued for services, $12,000 of which is included in Marketing with the balance in Research and development. There was no stock-based compensation during the six months ended June 30, 2019.

During the six months ended June 30, 2020 there were 650,000 options granted to certain scientific and business advisors (“Advisors”) with a weighted-average exercise price of $0.40. The options vest in equal annual installments over three years beginning in July 2020 and expire five years after grant date. There were no options exercised, forfeited or cancelled during the period. There were no options outstanding as of December 31, 2019.

As of June 30, 2020, there was $23,610 of unrecognized compensation related to the 650,000 of unvested options which is expected to be recognized over a weighted-average period 2.0 years. The options are being expensed over the vesting period for each Advisor. The weighted-average grant date fair value for options granted during the six months ended June 30, 2020 was $0.04.

The fair value of all options granted is determined using the Black-Scholes option-pricing model. The following weighted-average assumptions were used:

	Six Months Ended June 30, 2020			Six Months Ended June 30, 2019
Risk-free interest rate		0.51	%		-
Expected life of the options		3.5 years			-
Expected volatility of the underlying stock		70.7	%		-
Expected dividend rate		0	%		-

The risk-free interest rates is derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected term of the options. The expected life of the options is based on the option term. Due to the Company’s limited historical data, the expected volatility is calculated based upon the historical volatility of comparable companies whose share prices are publicly available for a sufficient period of time. The dividend rate is based on the Company never paying or having the intent to pay any cash dividends.

On April 22, 2020, the Company entered into a Consulting Agreement (“Agreement 1”) with a Management Consultant, pursuant to which the Management Consultant will provide business, intellectual property and Food and Drug Administration (“FDA”) regulatory consulting services to the Company for consideration of a onetime stock payment of 250,000 shares of common stock of the Company (the “Share Payment”). The term of Agreement 1 is twelve months and the value of the shares is being expensed over the term.

On May 22, 2020, the Company entered into a Consulting Agreement (“Agreement 2”) with a Software Development Consultant, pursuant to which the Software Development Consultant will provide software development consulting services to the Company for consideration of a onetime stock payment of 200,000 shares of common stock of the Company (the “Share Payment”). The term of Agreement 2 is twelve months and the value of the shares is being expensed over the term.

Also on May 22, 2020, the Company entered into a Consulting Agreement (“Agreement 3”) with a Marketing Consultant, pursuant to which the Marketing Consultant will provide marketing research consulting services to the Company for consideration of a onetime stock payment of 100,000 shares of common stock of the Company (the “Share Payment”). The term of Agreement 3 is four months and was terminated early as such the value of the shares was fully expensed.