Note 10. 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 June 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 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 provides the assumptions used in determining the fair value of option awards for the year June 30, 2021:

The following table summarizes stock option activity for the year June 30, 2021:

The weighted average grant date fair value of options awarded during the year ended June 30, 2021 was approximately $0.78 per share. No stock options were granted during the period from April 23, 2020 (inception) to June 30, 2020. As of June 30, 2021, unrecognized stock-based compensation expense related to unvested stock options totaled approximately $375,000, 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.

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, and the CEO became entitled to the full vesting of his restricted common stock.

As of June 30, 2021, the aggregate fair value of restricted shares vested totaled $106,437.

Compensation Expense

For the year ended June 30, 2021, the Company recorded stock-based compensation expense for all restricted shares and options of $187,349 in general and administrative expenses and $12,598 in research and development expenses. No stock-based compensation expense was recognized for the period from April 23, 2020 (inception) to June 30, 2020.