10. Stock Compensation Plan

On February 25, 2022, the Company held its 2020 Annual Meeting. At the 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 139,091 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.

Options are granted at the fair market value of the Company’s stock on the date of grant. Options can 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 March 31, 2023 and December 31, 2022, the Company did not award any stock appreciation rights under the 2021 Incentive Plan.

Total compensation cost related to stock options was approximately $79,966 and $90,247 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, there was approximately $182,475 of   unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of less than one year.

During the three-months ended March 31, 2023, the Company granted 7,000 stock options to the Chief Financial Officer as an onboarding award. The fair value of this award was $3.92 per share of common stock. This fair value was determined using the Black Scholes Option Pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. The assumptions used in the Black-Scholes Option Pricing model were as follows for stock options granted in the three-month period ended March 31, 2023:

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