Note 8. 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. On October 22, 2021, the Company’s stockholders approved an increase of the total authorized shares to 3,650,000 shares. 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 to ten years from the date of grant. As of March 31, 2024, the Company had 635,315 shares available for future issuance under the 2020 Stock Incentive Plan.

The Company grants non-qualified stock option awards under the 2020 Stock Incentive Plan to its Board of Directors, employees and consultants of the Company. These awards are subject to the satisfaction of certain performance targets and vesting requirements pursuant to the award.

The Company estimates the fair value of stock-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables, such as assumptions the Company makes for the volatility of our common stock the expected term of the stock options, the risk-free interest rate for a period that approximates the expected term, and our expected dividend yield. Each of these inputs is subjective and generally requires significant judgement to determine. Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award.

The following table summarizes the range of key assumptions used to determine the fair value of stock options granted during the three and nine months ended March 31, 2024 and 2023.

Schedule of Fair Value Assumptions of Stock Options

The following table summarizes stock option activity for the nine months ended March 31, 2024:

Schedule of Stock Option Activity

The weighted-average grant date fair value of options awarded during the nine months ended March 31, 2024 was approximately $1.83 per share. As of March 31, 2024, unrecognized stock-based compensation expense related to unvested stock options totaled approximately $2.1 million, which is expected to be recognized over a weighted average period of 3.1 years.

The Company recorded stock-based compensation expense of approximately $0.2 million for the three months ended March 31, 2024 and 2023, and approximately $0.6 million and 0.7 million for the nine months ended March 31, 2024 and 2023, respectively, all of which is included in general and administrative expenses.