6. Stock-Based Compensation

The Company periodically issues common stock and stock options as incentive compensation to directors and as compensation for the services of employees, contractors, and consultants of the Company.

On July 14, 2020, the Board of Directors of the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”), which was subsequently approved by the stockholders of the Company. The 2020 Plan provides for the granting of equity-based awards, consisting of stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards to employees, officers, directors and consultants of the Company and its affiliates, initially for a total of 233,333 shares of the Company’s common stock, under terms and conditions as determined by the Company’s Board of Directors. On October 7, 2022, the stockholders of the Company approved an amendment to the 2020 Plan to increase the number of common shares issuable thereunder by 180,000 shares, to a total of 413,333 shares. On November 27, 2023, the stockholders of the Company approved an amendment to the 2020 Plan to increase the number of common shares issuable thereunder by 336,667 shares, to a total of 750,000 shares.

As of June 30, 2025, unexpired stock options for 699,309 shares were issued and outstanding under the 2020 Plan and 50,691 shares were available for issuance under the 2020 Plan.

The fair value of a stock option award is calculated on the grant date using the Black-Scholes option-pricing model. The risk-free interest rate is based on the U.S. Treasury yield curve in effect as of the grant date. The expected dividend yield assumption is based on the Company’s expectation of dividend payouts and is assumed to be zero. The estimated volatility is based on the historical volatility of the Company’s common stock, calculated utilizing a look-back period approximately equal to the contractual life of the stock option being granted. Unless sufficient historical exercise data is available, the expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The fair market value of the common stock is determined by reference to the quoted market price of the common stock on the grant date.

For stock options requiring an assessment of value during the six months ended June 30, 2025, the fair value of each stock option award was estimated using the Black-Scholes option-pricing model with the following assumptions:

Schedule of Fair Value of Each Option Award Estimated Assumption 

For stock options requiring an assessment of value during the six months ended June 30, 2024, the fair value of each stock option award was estimated using the Black-Scholes option-pricing model with the following assumptions:

On June 17, 2022, the Board of Directors appointed Bas van der Baan to the Board of Directors. In connection with his appointment to the Board of Directors, and in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, Mr. van der Baan was granted stock options to purchase 25,000 shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $7.40 per share (the closing market price on the grant date), vesting 50% on the grant date and the remainder vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $158,525 ($6.341 per share), of which $79,263 was attributable to the portion of the stock options fully vested on June 17, 2022 and was therefore charged to operations on that date. The remaining unvested portion of the fair value of the stock options was charged to operations ratably from June 17, 2022 through June 30, 2024. During the three months and six months ended June 30, 2024, the Company recorded charges to general and administrative costs in the consolidated statement of operations of $9,695 and $19,390, respectively, with respect to these stock options.

On June 30, 2022, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the five non-officer directors of the Company stock options to purchase 10,000 shares (a total of 50,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $7.40 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $316,700 ($6.334 per share), which was charged to operations ratably from July 1, 2022 through June 30, 2024. During the three months and six months ended June 30, 2024, the Company recorded a charge to general and administrative costs in the consolidated statement of operations of $23,655 and $47,310, respectively, with respect to these stock options.

On November 6, 2022, the Board of Directors granted to each of the four officers of the Company stock options to purchase 20,000 shares (a total of 80,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $20.00 per share, vesting 25% on issuance and 25% on each anniversary date thereafter until fully vested, subject to continued service. The total fair value of the 80,000 stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $262,560 ($3.282 per share), which is being charged to operations ratably from November 6, 2022 through November 6, 2025. During the three months ended June 30, 2025 and 2024, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $4,088 and $12,396, respectively, with respect to these stock options. During the six months ended June 30, 2025 and 2024, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $8,131 and $24,660, respectively, with respect to these stock options.

On June 30, 2023, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the four non-officer directors of the Company stock options to purchase 10,000 shares (a total of 40,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $5.88 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $192,593 ($4.8131 per share), which was charged to operations ratably from July 1, 2023 through June 30, 2025. During the three months ended June 30, 2025 and 2024, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $23,968 and $24,100, respectively, with respect to these stock options. During the six months ended June 30, 2025 and 2024, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $47,672 and $48,068, respectively, with respect to these stock options.

On September 26, 2023, in connection with the employment agreement entered into with Bas van der Baan, Mr. van der Baan was granted a stock option to purchase 250,000 shares of the Company’s common stock. The stock option can be exercised on a cashless basis. The stock option is exercisable for a period of five years at an exercise price of $1.95 per share, which was equal to the closing market price of the Company’s common stock on the grant date. The stock option initially vested in equal increments quarterly over a three-year period commencing on the last day of each calendar quarter commencing October 1, 2023, subject to continued service. The fair value of this stock option, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $403,066 ($1.612 per share), which was being charged to operations ratably from September 26, 2023 through September 30, 2026. Effective June 16, 2025, in connection with an amendment to Mr. van der Baan’s employment agreement (see Note 5), the stock option was deemed fully vested and the remaining unamortized fair value was charged to operations on such date, and the time period for Mr. van der Baan to exercise this stock option at any time in the future that he is no longer providing services to the Company as a consultant, employee or otherwise was increased from ninety days to one year. During the three months ended June 30, 2025 and 2024, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $200,805 and $33,345, respectively, with respect to this stock option. During the six months ended June 30, 2025 and 2024, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $233,784 and $66,690, respectively, with respect to this stock option.

On June 30, 2024, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the four non-officer directors of the Company stock options to purchase 10,000 shares (a total of 40,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $2.37 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $73,976 ($1.8494 per share), which is being charged to operations ratably from July 1, 2024 through June 30, 2026. During the three months and six months ended June 30, 2025, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $9,220 and $18,340, respectively, with respect to these stock options.

On June 30, 2024, the Board of Directors, in conjunction with the Company’s efforts to preserve cash, granted to the four non-officer directors of the Company a total of 16,598 stock options to purchase shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $2.37 per share (the closing market price on the grant date) The stock options were granted in lieu of cash compensation, are exercisable for a period of five years and were immediately vested. The number of stock options granted to each of the four non-officer directors of the Company was equal to the cash payment such director would otherwise have been entitled to receive for the quarter ended June 30, 2024, divided by their grant date value as determined pursuant to the Black-Scholes option-pricing model, and was determined to be $27,500 ($1.6570 per share), which was charged to operations on June 30, 2024, the date on which the stock options were fully vested.

On July 1, 2024, in connection with the consulting agreement with Dr. Jan H.M. Schellens, M.D., Ph.D., Dr. Schellens was granted a stock option to purchase 15,000 shares of the Company’s common stock. The stock option can be exercised on a cashless basis. The stock option is exercisable for a period of five years at an exercise e price of $2.39 per share, which was equal to the closing market price of the Company’s common stock on the grant date. The stock option vested quarterly over a three-year period commencing on the last day of each calendar quarter commencing September 30, 2024. The fair value of this stock option, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $29,074 ($1.9382 per share), which is being charged to operations ratably from July 1, 2024 through June 30, 2027. During the three months and six months ended June 30, 2025, the Company recorded charges to general and administrative costs in the consolidated statements of operations of $2,418 and $4,810, respectively, with respect to this stock option. Effective as of July 31, 2025, the Company agreed to accept the resignation of Dr. Schellens and to terminate his consulting agreement.

On September 30, 2024, the Board of Directors, in conjunction with the Company’s efforts to preserve cash, granted to the four non-officer directors of the Company a total of 21,217 stock options to purchase shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $1.87 per share (the closing market price on the grant date) The stock options were granted in lieu of cash compensation, are exercisable for a period of five years and were immediately vested. The number of stock options granted to each of the four non-officer directors of the Company was equal to the cash payment such director would otherwise have been entitled to receive for the quarter ended September 30, 2024, divided by their quarterly value as determined pursuant to the Black-Scholes option-pricing model, and was determined to be $27,500 ($1.2961 per share), which was charged to operations on September 30, 2024, the date on which the stock options were fully vested.

On January 20, 2025, the Board of Directors, in conjunction with the Company’s efforts to preserve cash, granted to the four non-officer directors of the Company a total of 16,665 stock options to purchase shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $2.33 per share (the closing market price on the grant date) The stock options were granted in lieu of cash compensation, are exercisable for a period of five years and were immediately vested. The number of stock options granted to each of the four non-officer directors of the Company was equal to the cash payment such director would otherwise have been entitled to receive for the quarter ended December 31, 2024, divided by their grant date value as determined pursuant to the Black-Scholes option-pricing model, and was determined to be $27,500 ($1.65002 per share). The grant date value of the stock options of $27,500 was accrued at December 31, 2024 and charged to operations at that date. During the six months ended June 30, 2025, there was no expense charged to operations with respect to these stock options.

On March 31, 2025, the Board of Directors, in conjunction with the Company’s efforts to preserve cash, granted to the four non-officer directors of the Company a total of 32,181 stock options to purchase shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $1.21 per share (the closing market price on the grant date) The stock options were granted in lieu of cash compensation, are exercisable for a period of five years and were immediately vested. The number of stock options granted to each of the four non-officer directors of the Company was equal to the cash payment such director would otherwise have been entitled to receive for the quarter ended March 31, 2025, divided by their grant date value as determined pursuant to the Black-Scholes option-pricing model, and was determined to be $27,500 ($0.8546 per share), which was charged to operations on March 31, 2025, the date on which the stock options were fully vested.

On June 30, 2025, the Board of Directors, in accordance with the Company’s cash and equity compensation package for members of the Board of Directors, granted to each of the four non-officer directors of the Company stock options to purchase 10,000 shares (a total of 40,000 shares) of the Company’s common stock, exercisable for a period of five years at an exercise price of $0.905 per share (the closing market price on the grant date), vesting 12.5% on the last day of each subsequent calendar quarter-end until fully vested, subject to continued service. The fair value of these stock options, as calculated pursuant to the Black-Scholes option-pricing model, was determined to be $28,700 ($0.7175 per share), which is being charged to operations ratably from July 1, 2025 through June 30, 2027. During the three months and six months ended June 30, 2025, the Company did not record a charge to operations with respect to these stock options.

On June 30, 2025, the Board of Directors, in conjunction with the Company’s efforts to preserve cash, granted to the four non-officer directors of the Company a total of 42,648 stock options to purchase shares of the Company’s common stock, exercisable for a period of five years at an exercise price of $0.905 per share (the closing market price on the grant date) The stock options were granted in lieu of cash compensation, are exercisable for a period of five years and were immediately vested. The number of stock options granted to each of the four non-officer directors of the Company was equal to the cash payment such director would otherwise have been entitled to receive for the quarter ended June 30, 2025, divided by their grant date value as determined pursuant to the Black-Scholes option-pricing model, and was determined to be $27,500 ($0.6448 per share), which was charged to operations on June 30, 2025, the date on which the stock options were fully vested.

Gil Schwartzberg, a former director of the Company, died on October 30, 2022. Dr. John S. Kovach, the Chairman of the Board of Directors and the Company’s President and Chief Executive Officer, and Chief Scientific Officer, died on October 5, 2023, the employment agreement of the Company’s Chief Medical Officer, Dr. James S. Miser expired on July 31, 2024, the employment agreement of the Company’s Vice President and Chief Operating Officer, Eric J. Forman, terminated upon his resignation from the Company on December 31, 2024, and the consulting agreement of the Company’s Chief Medical Officer, Dr. Jan Schellens, was terminated effective with his resignation on July 31, 2025. Accordingly, the unvested stock options for each such person ceased vesting effective as of the respective dates that their services to the Company terminated. Furthermore, the expiration date of all vested stock options owned by each such person contractually expire one year from the respective dates that their services to the Company terminated.

A summary of stock-based compensation costs for the three months and six months ended June 30, 2025 and 2024 is as follows:

Summary of Stock-based Compensation Costs 

A summary of stock option activity, including options issued in the form of warrants, during the six months ended June 30, 2025 is as follows:

Summary of Stock Option Activity Including Options Form of Warrants 

Total deferred compensation expense for the outstanding value of unvested stock options was approximately $91,000 at June 30, 2025, which will be recognized subsequent to June 30, 2025 over a weighted-average period of approximately 18 months.

At June 30, 2025, the outstanding common stock options, including options issued in the form of warrants, are exercisable at the following prices per common share:

Schedule of Exercise Prices of Common Stock Options Outstanding and Exercisable Including Options Form of Warrants 

Based on the closing fair market value of $0.905 per common share on June 30, 2025, there was no intrinsic value attributed to exercisable but unexercised common stock options at June 30, 2025.

Outstanding stock options to acquire 75,000 shares of the Company’s common stock had not vested at June 30, 2025.

Upon the exercise of such stock options, the Company expects to satisfy the related stock obligations through the issuance of authorized but unissued shares of common stock.