Equity-Based Compensation

3 Months Ended

Mar. 31, 2023

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, 2023, there were no options granted and 150,000 options granted during the three months ended March 31, 2022.

Stock options activity during the three months ended March 31, 2023, was 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, 2023		2,020,214	$	3.01		8.86	$	—
Granted		—		—		—		—
Forfeited		—		—		—		—
Expired		—		—		—		—
Outstanding March 31, 2023		2,020,214	$	3.01		8.55	$	—
Vested and expected to vest March 31, 2023		2,020,214	$	3.01		8.55	$	—
Exercisable March 31, 2023		1,752,888	$	2.22		6.52	$	—

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, 2023		392,326		$	4.15		5.85	$	—
Granted		—			—		—		—
Expired		—			—		—		—
Vested		(125,000	)		0.47		9.52		—
Unvested March 31, 2023		267,326		$	5.23		8.55	$	—

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, 2023		579,155	$	3.09		7.93	$	—
Granted		—		—		—		—
Forfeited		—		—		—		—
Expired		—		—		—		—
Outstanding March 31, 2023		579,155	$	3.09		8.36	$	—
Vested and expected to vest March 31, 2023		579,155	$	3.09		8.36	$	—
Exercisable March 31, 2023		474,988	$	2.76		5.75	$	—

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, 2023		166,668		$	4.05		9.49	$	—
Granted		—			—		9.68		—
Expired		—			—		—		—
Vested		(62,500	)		0.32		—		—
Unvested March 31, 2023		104,168		$	11.39		5.75	$	—

Stock-based compensation expense was approximately $82,000 and $242,000 for the three months ended March 31, 2023 and 2022, resulting in a decrease in general and administrative expenses, respectively.

As of March 31, 2023, and 2022, respectively, there was approximately $134,000 and $729,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.