8. Stock Compensation Plan

On February 25, 2022, the Company held its reconvened 2020 Annual Meeting. At the reconvened 2020 Annual Meeting, the shareholders of the Company approved and ratified the Company’s 2021 Equity Incentive Plan (the “2021 Incentive Plan”) which is a successor to the 2012 Incentive Plan. The 2021 Incentive Plan provides the aggregate number of shares of Common Stock that may be issued under the 2021 Plan will not exceed the sum of (i) 166,667 new shares, (ii) the number of shares remaining available for the grant of new awards under the 2012 Incentive Plan as of immediately prior to the effective date of the 2021 Incentive Plan, and (iii) certain shares subject to outstanding awards granted under the 2012 Incentive Plan that may become available for issuance under the 2021 Incentive Plan, as such shares become available from time to time. As of December 31, 2022, an aggregate of 139,090 shares of common stock are covered by outstanding option awards and 148,455 shares of common stock are available for future awards under the 2021 Incentive Plan.

The purpose of the 2021 Incentive Plan is to advance the interests of the Company by affording certain employees and Directors of the Company and key consultants and advisors an opportunity to acquire or increase their proprietary interests in the Company. The 2021 Incentive Plan authorizes the grant of stock options (incentive and non-statutory), stock appreciation rights and restricted stock. Options are granted at the fair market value of the Company’s stock on the date of grant. Options can generally vest either immediately or over a period of up to three years from their respective grant dates and expire 10 years from the date of grant. As of December 31, 2022, and 2021, the Company had not awarded any stock appreciation rights under the 2021 Incentive Plan.

Recipients of stock awards under our 2021 Incentive Plan become the owner of record of the stock immediately upon grant, which may be subject to certain restrictions. The balance of unvested restricted stock will be forfeited and automatically transferred back to us at no cost upon the termination of the recipient’s employment. Upon vesting of restricted stock that is made to recipients who are employees, the recipient has the option to settle minimum withholding taxes by electing to have us withhold otherwise deliverable shares having a fair market value equal to the required tax obligations (“net-settlement”). The net-settlement shares are then immediately cancelled and retired and reduce the shares available for issuance under the Company’s 2021 Incentive Plan.

The Company uses the Black-Scholes Pricing Option Pricing Model to estimate the fair value of stock-based awards on the date of grant. The assumptions employed in the calculation of the fair value of share-based compensation expense were calculated as follows for all years presented:

The following table summarizes the assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2022 and 2021:

Summary of Assumptions Used to Estimate the Fair Value of Stock Options Granted

Total compensation cost related to stock options was $742,203 and $1,688,022 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, there was $139,420 of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of less than one year.

The following table represents stock option activity for the year ended December 31, 2022:

Summary of Stock Option Activity 

The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the years ended December 31, 2022 and 2021:

Summary of Weighted Average Grant Fair Value of Stock Options