11Share-based compensation

Equity Incentive Plan

Effective upon the closing of the Company’s IPO on December 21, 2020, the Company’s 2020 Equity Incentive Plan (the “Plan”) became effective. As of March 31, 2021, 230,603 shares were available for future grants and outstanding options to purchase common shares were as follows:

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As of March 31, 2021 the aggregate intrinsic value of options outstanding was $0.

During the three months ended March 31, 2021, the Company granted to employees, pursuant to their individual employment agreements, 62,734 options to purchase the Company’s Common Stock with an average exercise price of $7.26 per share, a contractual term of 10 years and a vesting period of 33.333% after one year and 66.667% in 24 monthly installments, thereafter. The options had an aggregate grant date fair value of $332,652 that was 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 0.59% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 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 $6.75 to $7.51 per share.

The Company recognized share-based compensation expense of $24,825 during the three months ended March 31, 2021 related to stock options. The unrecognized compensation expense for options at March 31, 2021 was $307,827.

Stock Options for Unregistered Securities

In addition to the stock options issued under the Plan, and in conjunction with the IPO, the Company granted 292,500 of non-qualified stock options as provided for in the President’s original employment agreement. The 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 9.72 years. As of March 31, 2021, there was no unrecognized compensation expense related to these options as they were 100% vested upon

issuance. These options are for unregistered securities, and the option agreement does not include a registration rights agreement. Consequently, the Company has not recognized a contingent liability associated with registering the securities for the arrangement. As of March 31, 2021, the aggregate intrinsic value of the unregistered options outstanding and exercisable was $0.

Underwriters Warrants

In conjunction with the IPO, the Company granted the underwriters 172,500 warrants to purchase common stock at an exercise price of $12.50 per share. The warrants have a remaining contractual term of 4.72 years and are not exercisable prior to December 21, 2021. As of March 31, 2021, the aggregate intrinsic value of the warrants outstanding was $0.