8. Stock Based Awards

Equity Incentive Plans

The Company adopted an equity incentive plan in 2007 (the “2007 Plan”). The 2007 Plan has expired, and the Company no longer issues any awards under the 2007 Plan. As of December 31, 2022, there are 424 outstanding incentive stock options granted under the 2007 Plan that are eligible to purchase shares of the Company’s common stock. The maximum term of options granted under the 2007 Plan was ten years.

The Company adopted a second equity Incentive plan in 2015 (the “2015 Plan”) under which 833,333 shares of common stock have been reserved for issuance to employees, and non-employee directors and consultants of the Company. Recipients of incentive stock options granted under the 2015 Plan shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2015 Plan is ten years. The options generally vest 25% after one year, with the remaining balance vesting monthly over the following three years. As of December 31, 2022, approximately 483,833 million options remain available for future grant under the 2015 Plan.

The following table summarizes stock option transactions for the 2007 Plan and 2015 Plan, collectively, for the years ended December 31, 2022 and 2021 (table in thousands, except per share amounts):

Schedule of Share-based Compensation, Stock Options, Activity

During the year ended December 31, 2022 the Company granted stock options to officers, directors, employees and consultants to purchase a total of 158,012 shares of common stock. The options have an exercise price of $5.04 per share, expire in ten years, and vest as follows: one half vests on the one-year anniversary of the grant date and the remainder will vest in eight equal quarterly increments with the first such quarterly increment vesting on September 30, 2022. The total fair value of these options at the grant date was approximately $633,000 using the Black-Scholes Option pricing model. The Black-Scholes option pricing model includes the following weighted average assumptions for grants made during the year ended December 31, 2022:

Schedule of Weighted Average Assumptions Used for Grants

During the year ended December 31, 2021 the Company granted stock options to officers, directors, employees and consultants to purchase a total of 86,170 shares of common stock. The options have an exercise price of $13.32 per share, expire in ten years, and vest as follows: one half vests on the one-year anniversary of the grant date and the remainder will vest in eight equal quarterly increments with the first such quarterly increment vesting on September 30, 2021. The total fair value of these options at the grant date was approximately $965,000 using the Black-Scholes Option pricing model. The Black-Scholes option pricing model includes the following weighted average assumptions for grants made during the year ended December 31, 2021:

For the years ended December 31, 2022 and 2021, equity-based compensation expense for options vesting during the period was $855,000 and $724,000, respectively.

As of December 31, 2022, there was $1,052,000 of total unrecognized compensation expense related to non-vested stock options that is expected to be recognized over a weighted average period of 2.8 years. For options granted and outstanding, there were 349,901 options outstanding which were fully vested or expected to vest, with an aggregate intrinsic value of $0, a weighted average exercise price of $14.98, and weighted average remaining contractual term of 8.4 years at December 31, 2022. For vested and exercisable options, outstanding shares totaled 140,359, with an aggregate intrinsic value of $0.00. These options had a weighted-average exercise price of $26.53 per share and a weighted-average remaining contractual term of 7.2 years at December 31, 2022.

The aggregate intrinsic value of outstanding and exercisable options at December 31, 2022 was calculated based on the closing price of the Company’s common stock as reported on the Nasdaq Capital Market on December 31, 2022 of approximately $1.95 per share less the exercise price of the options. The aggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying options.

Common Stock Reserved for Future Issuance

The following table presents information concerning common stock available for future issuance as of December 31, (in thousands):

Schedule of Common Stock Reserved for Future Issuance