10. Stock Compensation Plan

On September 29, 2023, the Board of Directors approved an amendment to the 2021 Equity Incentive Plan (the “Incentive Plan”) to increase the authorized shares available under the Incentive Plan by 1,000,000. The amendment was approved by the Shareholders on December 14, 2023.

The Incentive Plan, as amended, provides aggregate number of shares of Common Stock that may be issued under the 2021 Plan will not exceed the sum of (i) 1,166,167 new shares, plus (ii) any shares remaining available for the grant of new awards under the 2012 Plan as of immediately prior to the effective date of the 2021 Equity Incentive Plan; plus, (iii) certain shares subject to outstanding awards granted under the 2012 Plan that may become available for issuance under the 2021 Equity Incentive Plan, as such shares become available from time to time.

Options are granted at the fair market value of the Company’s stock on the date of the grant which determines the exercise price after the completion of the vesting period. 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.

A summary of stock option activity for the nine months ended September 30, 2024 is as follows:

Summary of Stock Option Activity 

As of September 30, 2024, an aggregate of 1,022,503 shares of common stock are covered by outstanding option awards and 3,664 shares of common stock are available for future awards under the Incentive Plan.

Total compensation cost related to stock options was $330,802 and $402,805 for the three months ended September 30, 2024 and 2023, respectively. Total compensation cost related to stock options was $458,365 and $546,399 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was $195,296 of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of less than one year.