Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

Stock-Based Compensation
6 Months Ended
Jun. 30, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock Incentive Plan
On October 31, 2014, after the closing of the Merger, the Board of Directors approved the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”). The share reserve under the 2014 Plan equals 10% of the number of issued and outstanding shares of common stock of the Company. In August 2020, the Company approved Amendment No. 2 to the 2014 Plan, which increased the share reserve by an additional 7,876,835 shares over the 10% of the number of issued and outstanding shares of common stock, and removed certain restrictions on the number of shares of common stock and the amount of cash-based awards up to which participants of the 2014 Plan can receive in a calendar year. The 2014 Plan authorizes the issuance of awards including stock options, stock appreciation rights, restricted stock, stock units and performance units to employees, directors, and consultants of the Company. As of June 30, 2021, the Company had 23,685,150 shares available for future grant under the 2014 Plan.
Stock Options
The following is a summary of option activities under the Company’s 2014 Plan for the six months ended June 30, 2021:
Number of
Exercise Price
Term (Years)
Outstanding, December 31, 2020 22,050,000  $ 0.06  9.52
Granted 700,000  0.16 
Exercised (106,250) 0.05 
Cancelled (753,750) 0.05 
Forfeited (40,000) 0.05 
Outstanding, June 30, 2021 21,850,000  $ 0.07  9.05
Exercisable, June 30, 2021 6,130,000  $ 0.11  8.72
Vested and expected to vest, June 30, 2021 21,850,000  $ 0.07  9.05
During the three and six months ended June 30, 2021, 106,250 stock options with an intrinsic value of $13,281 were exercised for gross proceeds of $4,783.
The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions:
For the Six Months Ended June 30, 2021
Dividend yield 0.00%
Volatility factor 124.2%
Risk-free interest rate 1.11%
Expected term (years) 6.01
Awards Granted Outside the 2014 Plan
During the six months ended June 30, 2021, the Company granted an aggregate of 1,200,000 restricted shares of common stock to a non-employee consultant for investor relations services. Upon entering the service contract, half of the shares were issued, the remaining 50% will be issued upon the completion of the six month service contract.
The following is a summary of restricted stock activity outside of the Company’s 2014 Plan during the six months ended June 30, 2021:
Number of
Date Fair
Unvested, December 31, 2020   $  
Granted 1,200,000  0.08 
Released (600,000) 0.08 
Unvested, June 30, 2021 600,000  $ 0.08 
Stock-Based Compensation Expense
The Company recognizes compensation expense using the straight-line method over the requisite service period. Stock-based compensation is included in the Condensed Consolidated Statements of Comprehensive Loss in general and administrative or research and development, depending upon the nature of services provided. Stock-based compensation expense (including compensation expense for restricted stock awards discussed above) was as follows:
Three Months Ended June 30, Six Months Ended
June 30,
2021 2020 2021 2020
Research and development $ 13,612  $ —  $ 19,363  $ — 
General and administrative 98,087  28,709  238,916  92,851 
$ 111,699  $ 28,709  $ 258,279  $ 92,851 
The total amount of unrecognized compensation cost was $764,803 as of June 30, 2021. This amount will be recognized over a weighted average period of 2.9 years.