Stock-based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

Note 10. Stock-based Compensation

During the six months ended June 30, 2022 and 2021, there was $17,841 in stock-based compensation associated with stock options included in Research and development expense. Additionally, during the same periods there was expense associated with shares issued for services. The following table shows how the expenses associated with shares issued for services were classified in the condensed consolidated statements of operations during the respective periods.

	Six Months Ended June 30,
	2022		2021
Research and development	$	-	$	29,031
Sales and marketing		-		48,628
General and administrative		6,968		48,178
Total expense – shares issued for services	$	6,968	$	125,837

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. There were no options exercised, forfeited or cancelled during the period. During the six months ended June 30, 2022 there were no options granted.

As of June 30, 2022, there was $18,243 of unrecognized compensation related to 1,100,000 outstanding options which is expected to be recognized over a weighted-average period of 9 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 June 30, 2022 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, 2022		Six Months Ended June 30, 2021
Risk-free interest rate		N/A		0.21	%
Expected life of the options		N/A		3.5 years
Expected volatility of the underlying stock		N/A		76.3	%
Expected dividend rate		N/A		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.

Options outstanding at June 30, 2022 consist of:

Date Issued	Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
March 12, 2020		500,000		333,333	$	0.40	March 12, 2025
June 27, 2020		150,000		100,000	$	0.40	June 27, 2025
January 1, 2021		450,000		300,000	$	0.65	December 31, 2025
Total		1,100,000		583,333

Warrants outstanding at June 30, 2022 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
August 10, 2021		930,000		930,000	$	1.25	August 9, 2024
February 23, 2022		14,854		14,854	$	0.705	February 22, 2024
Total		1,026,647		1,026,647