On March 20, 2007, the Company’s Board of Directors approved the 2007 Stock Incentive Plan (the “2007 Stock Plan”) for the issuance of up to 7,143 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. This plan was approved by the stockholders on November 2, 2007. The exercise price of stock options under the 2007 Stock Plan was determined by the compensation committee of the Board of Directors and could be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. As of December 31, 2022, there were 515 options issued and outstanding under the 2007 Stock Plan.

On November 2, 2010, the Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (“2010 Stock Plan”) for the issuance of up to 8,572 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. From time to time the number of shares authorized for options was increased such that 400,000 were authorized as of September 5, 2019. The exercise price of stock options under the 2010 Stock Plan is determined by the compensation committee of the Board of Directors and may be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. Options become exercisable over various periods from the date of grant and expire between five and ten years after the grant date. As of December 31, 2022, there were 202,381 options issued and outstanding under the 2010 Stock Plan. There are no shares available to be issued under this plan.

On September 17, 2020, the stockholders approved and adopted the 2020 Stock Incentive Plan ("2020 Stock Plan") for the issuance of up to 400,000 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. The number of shares authorized for options was increased such that 7,000,000 were authorized as of December 31, 2022. As of December 31, 2022, there were 2,093,002 options issued and outstanding under the 2020 Stock Plan.

In the event of an employee’s termination, the Company will cease to recognize compensation expense for that employee. Stock forfeitures are recognized as incurred. The fair value of the stock-based payment is recognized over the stated vesting period.

The Company has applied fair value accounting for all stock-based payment awards since inception. The fair value of each option or warrant granted is estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used for the years ended December 31, 2022 and 2021 are as follows:

Expected dividends —The Company has never declared or paid dividends on its common stock and has no plans to do so in the foreseeable future.

Expected volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The expected volatility assumption is derived from the historical volatility of the Company’s common stock over a period approximately equal to the expected term.

Risk-free interest rate—The assumed risk-free rate used is a zero coupon U.S. Treasury security with a maturity that approximates the expected term of the option.

Expected life of the option—The period of time that the options granted are expected to remain unexercised. Options granted during the year have a maximum term of seven years. The Company estimates the expected life of the option term based on the weighted average life between the dates that options become fully vested and the maximum life of options granted.

The Company records stock-based compensation based upon the stated vesting provisions in the related agreements. The vesting provisions for these agreements have various terms as follows:

During the years ended December 31, 2022 and 2021, the Company granted 1,728,000 and 2,260,000 options to employees and directors having an approximate fair value of $0.7 million and $0.5 million based upon the Black-Scholes option pricing model, respectively.

Stock-based compensation expense included in general and administrative expenses and research and development expenses relating to stock options issued to employees for the years ended December 31, 2022 and 2021 was $260,000 and $204,000, respectively. Stock-based compensation expense included in general and administrative expenses and research and development expenses relating to stock options issued to consultants for the years ended December 31, 2022 and 2021 was $215,000 and $212,000, respectively.

6. Stock-Based Compensation and Warrants (continued)

A summary of stock option activity for the years ended December 31, 2022 and 2021 is as follows:


		Weighted		Weighted Average	Aggregate
		Average Exercise		Remaining	Intrinsic
	Options	Price		Contractual Life	Value
Balance - December 31, 2020	399,779	$	23.50	6.09 years	$	—

Granted	226,000		3.30
Exercised	—		—
Expired	(214)		431.50
Forfeited	—		—
Balance - December 31, 2021	625,565		16.12	5.58 years		—

Granted	1,728,000		0.58
Exercised	—		—
Expired	(43,126)		67.81
Forfeited	(14,541)		3.61

Balance -December 31, 2022 - outstanding	2,295,898	$	3.53	6.44 years	$	—

Balance - December 31, 2022 - exercisable	429,736	$	15.40	4.57 years	$	—

Grant date fair value of options granted - December 31, 2022		$	706,264

Weighted average grant date fair value - December 31, 2022		$	0.41

Grant date fair value of options granted - December 31, 2021		$	50,100

Weighted average grant date fair value - December 31, 2021		$	2.20

The options outstanding and exercisable at December 31, 2022 are as follows:

Options Outstanding

Options Exercisable

Weighted

Average

Weighted

Average

Remaining

Average

Remaining

Range of

Exercise

Contractual

Exercise

Contractual

Exercise Price

Options

Price

Life

Options

Price

Life

0.00 – $350.00

2,291,596

2.173

6 years

425,434

8.19

5 years

351.00 – $700.00

843

467.73

1 years

843

467.73

1 years

701.00 – $1000.00

3,459

792.33

2 years

3,459

792.33

2 years

As of December 31, 2022, total unrecognized stock-based compensation expense related to stock options was $997,000, which is expected to be expensed through April 2025.

The FASB’s guidance for stock-based payments requires cash flows from excess tax benefits to be classified as a part of cash flows from operating activities. Excess tax benefits are realized tax benefits from tax deductions for exercised options in excess of the deferred tax asset attributable to stock compensation costs for such options. The Company did not record any excess tax benefits in 2022 or 2021. Cash received from option exercises under the Company’s stock-based compensation plans for the years ended December 31, 2022 and 2021 was zero.