Stock-based Compensation

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-based Compensation

Note 9. Stock-based Compensation

During the six months ended June 30, 2021 and 2020, there was $17,841 and $1,240, respectively, in stock-based compensation associated with stock options included in Research and development expense. Additionally, during the same periods there was $125,837 and $26,219, respectively, of expense associated with shares issued for services. The following table shows where the expense has been recorded.

	Six Months Ended June 30,
	2021		2020
Research and development	$	29,031	$	14,219
Sales and marketing		48,628		12,000
General and administrative		48,178		-
Total expense – shares issued for services	$	125,837	$	26,219

During the six months ended June 30, 2021, there were 450,000 options granted to certain scientific and business advisors (“Advisors”) with a weighted-average exercise price of $0.65. The options vest in equal annual installments over three years beginning in April 2021 and expire five years after grant date. 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 either period.

As of June 30, 2021, there was $53,927 of unrecognized compensation related to the 1,100,000 of outstanding options which is expected to be recognized over a weighted-average period of 22 months. 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, 2021 was $0.12.

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, 2021			Six Months Ended June 30, 2020
Risk-free interest rate		0.21	%		0.51	%
Expected life of the options		3.5 years			3.5 years
Expected volatility of the underlying stock		76.3	%		70.7	%
Expected dividend rate		0	%		0	%

The risk-free interest rates are 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 March 8, 2021, the Company entered into a Consulting Agreement (“Agreement 1”) with an Investor Relations Consultant, pursuant to which the Investor Relations Consultant was to provide investor relations services to the Company for consideration of 120,000 shares of common stock of the Company (the “Share Payment”) in addition to monthly cash payments for a term of three months. Agreement 1 contains a clause providing the Company the right to cancel the shares of common stock pursuant to the terms of Agreement 1. The value of the shares were to be expensed when the Investor Relations Consultant met the terms of the Consulting Agreement. The Company notified the Consultant that the Agreement was terminated effective April 7, 2021 without the terms of the Consulting Agreement being met. The Company cancelled the Share Payment associated with the Consulting Agreement.

On March 10, 2021, the Company entered into a Consulting Agreement (“Agreement 2”) with a Legal Consultant to provide legal services to the Company for consideration of 30,000 shares of common stock of the Company (the “Share Payment”). The term of Agreement 2 is 16 months and the value of the shares is being expensed over the term.

On May 5, 2021, the Company entered into a Consulting Agreement (“Agreement 3”) with a Strategic Advisory Consultant to provide strategic and advisory services to the Company for consideration of 30,000 shares of common stock of the Company (the “Share Payment”). The term of Agreement 3 is three months and the value of the shares is being expensed over the term.

On June 14, 2021, the Company entered into a Consulting Agreement (“Agreement 4”) with a Strategic Advisory Consultant to provide strategic and advisory services to the Company for consideration of 20,000 shares of common stock of the Company (the “Share Payment”). The term of Agreement 4 is one month and the value of the shares is being expensed over the term.

Options outstanding at June 30, 2021 consist of:

Date Issued	Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
March 12, 2020		500,000		166,667	$	0.40	December 31, 2024
June 27, 2020		150,000		50,000	$	0.40	December 31, 2024
January 1, 2021		450,000		150,000	$	0.65	December 31, 2025
Total		1,100,000		366,667

Warrants outstanding at June 30, 2021 consist of:

Date Issued	Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
March 16, 2021		15,900		15,900	$	0.75	March 15, 2023
May 7, 2021		53,704		53,704	$	0.74	May 6, 2023
June 17, 2021		12,189		12,189	$	0.83	June 16, 2023
Total		89,793		89,793