Note 7. Stock-Based Compensation

In June 2020, the Board of Directors adopted the 2020 Stock Incentive Plan, which provided for the grant of qualified incentive stock options and nonqualified stock options or other awards to the Company’s employees, officers, directors, advisors, and outside consultants for the purchase of up to 1,650,000 shares of the Company’s common stock. Other awards include restricted stock, restricted stock units, stock appreciation rights and other stock-based awards. Other stock-based awards are awards valued in whole or in part by reference to, or are otherwise based on, shares of common stock. Stock options generally vest over a four-year period, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan). The awards expire in five or ten years from the date of grant. As of September 30, 2021, the Company had 63,096 shares available for future issuance under the 2020 Stock Incentive Plan.

Stock Options

In March 2021, the Company granted non-qualified stock option awards under the 2020 Stock Incentive Plan of 604,404 shares of the Company’s common stock to its Board of Directors, an employee and consultants of the Company. These awards are subject to the satisfaction of certain performance targets and vesting requirements pursuant to the award.

The following table summarizes stock option activity for the quarter September 30, 2021:

 Schedule of Stock Awards Granted

As of September 30, 2021, unrecognized stock-based compensation expense related to unvested stock options totaled approximately $341,111 which is expected to be recognized over a weighted average period of 3.0 years.

Restricted Stock

In September 2020, the Company awarded 982,500 shares of restricted common stock to its CEO, at a grant date fair value of $0.11 per share. The restrictions are subject to the satisfaction of certain performance targets and vesting requirements pursuant to the award and employment agreement.

Upon the IPO in May 2021, the CEO became entitled to the full vesting of his restricted stock.

Compensation Expense

For the three months ended September 30, 2021, the Company recorded stock-based compensation expense for all restricted shares and options of $24,293 in general and administrative expenses and $9,880 in research and development expenses. For the three months ended September 30, 2020, the Company recorded stock-based compensation expense for all restricted shares and options of $16,408 in general and administrative expenses and zero in research and development expenses.