12. Stock-Based Compensation

In September 2020, the Company awarded 982,500 shares of restricted common stock to its CEO, at a grant date fair value of $0.1083 per share. The restrictions are subject to the satisfaction of certain performance targets and vesting requirements pursuant to the award and employment agreement.

In the event of a change in control of our company, the CEO will be entitled to the vesting of 50% of any stock-based awards granted but not yet vested prior to the change in control event not less than six months after the change in control event, provided the CEO remains employed by our company. If the change in control event is an initial public offering, the CEO will be entitled to the full vesting of any stock-based awards. Subsequently, the Company closed its IPO in May 2021, which resulted in a change of control. Therefore, the CEO will be entitled to the full vesting of any stock-based awards.

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

Stock Options

Value of Stock Options

The Company has valued awards herein using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, the Company estimates its expected stock volatility based on historical volatility of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for the time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table provides the assumptions used in determining the fair value of option awards as of March 31, 2021:

Changes in awards granted under the 2020 Stock Plan as of March 31, 2021 are as follows:

For the three months ended March 31, 2021, 301,554 shares vested and the Company recorded stock-based compensation expense of $45,302 in general and administrative expenses and $2,105 in research and development expenses. For the nine months ended March 31, 2021, 383,418 shares vested and the Company recorded stock-based compensation expense of $82,404 in general and administrative expenses and $2,105 in research and development expenses.

As of March 31, 2021, there are 63,096 shares available to be granted under the 2020 Stock Plan.

As of March 31, 2021, unrecognized stock-based compensation expense associated with the restricted common stock and non-qualified stock options totaled $501,700.