11.   Share-Based Compensation

Equity Incentive Plan

The Company’s 2020 Equity Incentive Plan (the “Plan”) became effective on December 21, 2020. Under the Plan, 812,500 shares are authorized to be issued. As of December 31, 2021 and 2020, 63,353 and 293,337 shares, respectively, were available for future grants.

The Plan provides for grants to employees, members of the Board, consultants and advisors to the Company, in the form of stock awards, options, and other equity-based awards. The amount and terms of grants are determined by the Board. Stock options have a maximum term of 10 years after date of grant and are exercisable in cash or as otherwise determined by the Board. The maximum aggregate number of shares of shares during any calendar year for an individual is limited to 500,000.

The table below sets forth the outstanding options to purchase common shares under the Plan:

​

​

As of December 31, 2021 and 2020, the aggregate intrinsic value of options outstanding and exercisable was $0.

During the year ended December 31, 2021, the Company granted certain individuals options to purchase 229,984 shares of the Company’s common stock with an average exercise price of $6.85 per share, contractual terms of 10 years and vesting periods ranging from 8.33% monthly over one year to 33.333% vesting after one year with the remaining 66.667% vesting in 24 monthly installments, thereafter. The options had an aggregate grant date fair value of $1,150,284 as calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rates ranging from 0.505% to 1.075% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected lives ranging from 5.27 years to 6.0 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility ranging from 89.04% to 90.16% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock ranging from $6.50 to $7.51 per share.

Upon the closing of the Company’s IPO, the Company granted options to employees, pursuant to their individual employment agreements, to purchase 519,163 shares of the Company’s common stock with an exercise price of $10.00 per share and a contractual term of 10 years. The options were 100% vested at the grant date. The options had an aggregate grant date fair value of $3,441,687 as calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rate of 0.39% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 5.0 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility of 88.3% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $9.80 per share.

For the years ended December 31, 2021 and 2020, the Company recognized share-based compensation expense related to stock options of $322,881 and $3,441,687, respectively. The unrecognized compensation expense for stock options at December 31, 2021 was $827,402 and there was no unrecognized

compensation expense related to stock options at December 31, 2020 as the granted options were 100% vested upon issuance.

Stock Options for Unregistered Securities

In addition to the stock options issued under the Plan, and in conjunction with the IPO, the Company granted non-qualified stock options to purchase 292,500 shares of common stock as provided for in the President’s employment agreement (the “President Options”). The President Options are exercisable within 10 years of the date of grant at $10.00 per share, were 100% vested at the grant date and have a remaining contractual term of 8.96 years.

The options had an aggregate grant date fair value of $1,987,831 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rate of 0.37% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 5.0 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility of 88.3% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $10.00 per share. The Company recognized share-based compensation expense of $1,987,831 during 2020 related to the stock options. As of December 31, 2021 and 2020, there was no unrecognized compensation expense related to these options as they were 100% vested upon issuance.

The shares of common stock issuable upon exercise of the President Options will be unregistered, and the option agreement does not include any obligation on the part of the Company to register such shares of common stock. Consequently, the Company has not recognized a contingent liability associated with registering the securities for the arrangement. As of December 31, 2021, the aggregate intrinsic value of the President Options was $0.

Underwriters Warrants

In conjunction with the IPO, the Company granted the underwriters warrants to purchase 172,500 shares of common stock at an exercise price of $12.50 per share. The warrants have a five-year contractual term and were not exercisable prior to December 21, 2021.

The Company has accounted for the warrants as equity-based awards issued to a non-employee. The warrants had an aggregate grant date fair value of $1,108,785 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rate of 0.37% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 5.0 years, (3) expected volatility of 88.3% based on the average historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $10.00 per share.

There was no net impact recognized by the Company in the accompanying financial statements as the warrants were equity-based awards issued for services rendered by the underwriter for the IPO that was offset by the Company recognizing the fair value of the warrants as a direct and incremental costs associated with the IPO by reducing paid-in capital for the same amount. There is no unrecognized compensation expense for these awards as of December 31, 2020.

As of December 31, 2021, the warrants have a remaining contractual term of 3.96 years and are 100% exercisable. The aggregate intrinsic value of the warrants outstanding was $0.