NOTE 11 – SHARE-BASED COMPENSATION

Global Stock Incentive Plan

On May 31, 2022, the shareholders of the Company approved the Company’s Board of Directors proposal to increase the Company’s Global Incentive Plan (the “Plan”) by 1,575,000 shares, thus bringing the total number of stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) that may be issued pursuant to the Plan to 1,950,855.

On May 31, 2023, the shareholders of the Company approved the Company’s Board of Directors proposal to increase the Company’s Plan by an additional 500,000 shares, thus bringing the total number of stock options, RSUs and RSAs that may be issued pursuant to the Plan to 2,450,855.

Under the term of the Plan, on the grant date, the Board of Directors determines the vesting schedule of each stock option and RSUs on an individual basis. All stock options expire ten (10) years from the date of the grant. Vested options expire 90 days after the termination of employment of the grantee.

Stock Options

The fair value of options and share awards granted under the Plan during the nine months ended September 30, 2023 was estimated at the date of grant using the Black-Scholes option pricing model and the following assumptions for grants:

For the nine months ended September 30, 2023 and 2022, the Company recognized $641,628 and $655,973 of stock compensation expense relating to stock options, respectively. For the three months ended September 30, 2023 and 2022, the Company recognized $253,392 and $172,799 of stock compensation expense relating to stock options, respectively. As of September 30, 2023, there was $1,323,313 of unrecognized stock compensation expense related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 2.9 years.

Restricted Stock Awards

In July 2019, the Board of Directors of the Company authorized grants of restricted stock awards (“RSAs”) through a restricted stock award purchase agreement to certain founders, consultants, and advisors of the Company. Certain grants to the Company’s founders were fully vested at the date of incorporation, other grants vest over a four-year period on each anniversary of the grant date, based on continued employment, and other grants vest based on various milestones. The shares of common stock underlying the RSAs are issued upon grant.

For the nine months ended September 30, 2023 and 2022, the Company recognized $288,183 and $749,086 of stock compensation expense relating to RSAs, respectively. For the three months ended September 30, 2023 and 2022, the Company recognized $46,401 and $120,891 of stock compensation expense relating to RSAs, respectively. As of September 30, 2023, there was $24,447 of unrecognized compensation expense related to unvested restricted share awards that is expected to be recognized over a weighted-average period of approximately 3 months.

Restricted Stock Units

On June 14, 2022, the Board of Directors of the Company authorized the grant of 356,851 RSUs, of which 336,538 were granted to an officer of the Company who joined the Company in February 2022. Of the RSUs granted to the officer, 48,077 vested immediately and the balance of 288,461 vested in equal quarterly installments through February 28, 2023. Under the terms of the officer’s employment agreement, the Company also agreed to guarantee the minimum value of the RSUs on their vesting dates.

On February 28, 2023, the Company issued 33,387 fully vested RSUs to an officer upon his one year anniversary of employment.

On August 2, 2023, the Company issued 28,090 fully vested RSUs to an officer.

On August 16, 2023, the Company issued 400,000 fully vested on September 7, 2023 RSUs to an advisor, the Company also agreed to guarantee the minimum value of the RSUs on their vesting dates. The Company accrued $548,450 in accounts payable in the condensed consolidated balance sheet, reflecting this minimum value obligation as of September 30, 2023, to be paid over three installments.

For the nine months ended September 30, 2023 and 2022, the Company recognized $782,175 and $777,637 of stock compensation expense relating to RSUs, respectively. For the three months ended September 30, 2023 and 2022, the Company recognized $421,819 and $337,351 of stock compensation expense relating to RSUs, respectively. As of September 30, 2023, there was no unrecognized compensation expense remaining related to unvested restricted share units .