Equity-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

Note 3: Equity-Based Compensation

The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. During the three months ended March 31, 2022 there were 300,000 options granted and no options granted in the three months ended March 31, 2021.

Stock option for employees’ activity during the three months ended March 31, 2022, is as follows:

Stock option activity for employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2022		1,498,798		$	4.22		9.11	$	—
Granted		150,000			0.70		9.75		—
Forfeited		—			233.54		—		—
Expired		(739	)		—		—		—
Outstanding March 31, 2022		1,648,059		$	3.80		8.94	$	—
Vested and expected to vest March 31, 2022		1,648,059		$	3.80		8.94	$	—
Exercisable March 31, 2022		1,216,894		$	3.15		6.08	$	—

Unvested stock option activity for employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Unvested January 1, 2022		412,500		$	4.15		5.85	$	—
Granted		150,000			0.70		9.75		—
Expired		(739	)		233.54		—		—
Vested		(130,596	)		1.52		9.88		—
Unvested March 31, 2022		431,165		$	2.69		7.32	$	—

Stock option activity for non-employees:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2022		279,723	$	6.12		7.93	$	—
Granted		150,000		0.70		9.75		—
Forfeited		—		—		—		—
Expired		—		—		—		—
Outstanding March 31, 2022		429,723	$	4.23		8.40	$	—
Vested and expected to vest March 31, 2022		429,723	$	4.23		8.40	$	—
Exercisable March 31, 2022		222,770	$	6.05		7.96	$	—

Unvested stock option activity for non-employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Unvested January 1, 2022		97,831		$	3.89		7.82	$	—
Granted		150,000			0.70		9.75		—
Expired		—			—		—		—
Vested		(40,878	)		1.35		—		—
Unvested March 31, 2022		206,953		$	3.66		7.60	$	—

Stock-based compensation expense was approximately $242,000 and $526,000 for the three months ended March 31, 2022 and 2021, resulting in an increase in general and administrative expenses, respectively.

As March 31, 2022, and 2021, respectively, there was approximately $729,000 and $914,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.