Note 6 – Stock-based Compensation 

We recorded $2,257,863 and $357,039 of stock-based compensation expense for the nine months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021, we awarded the following equity instruments:

 Equity Instruments Awarded

We valued the RSAs and RSUs based on the closing share price on the date of grant. The fair values of the stock options and warrants granted were estimated using the Black-Scholes option pricing model at the date of grant. The RSUs, stock options and warrants issued to consultants were for services to be provided in 2021 and 2022. Of the awards granted to consultants, 12,500 RSUs and 100,000 warrants vested upon grant but represent services that will be provided in 2021. As such, at September 30, 2021, we recognized $107,193 related to these awards as a prepaid expense for the portion of services the consultant has yet to provide.

On August 5, 2020, we issued 324,360 RSAs under the 2019 Omnibus Incentive Plan to our employees and directors, of which 214,078 shares of common stock vested on October 6, 2020 when we successfully completed our underwritten public offering and up-listed to the Nasdaq Capital Market and 55,142 shares of common stock vested on August 5, 2021. The remaining 53,610 shares of common stock vest on August 5, 2022, the second year anniversary of the grant date. Between the fourth quarter of 2020 and September 30, 2021, 29,847 shares have been forfeited to pay for federal, state and local income taxes or upon employment termination.

On July 1, 2021, we granted 198,930 RSUs under the 2019 Omnibus Incentive Plan to our employees. Of the RSUs awarded, 79,572 RSUs contain a service condition that requires continued employment over a two-year period. Half (or 39,786) of the RSUs vest on July 1, 2022 and the remaining half vest on July 1, 2023. 119,358 RSUs vest upon meeting the following performance criteria: (i) 39,786 RSUs vest upon the completion of the interim analysis of Cohorts 1 and 2 for our PCS6422 Phase 1B clinical trial; (ii) 39,786 RSUs vest upon the completion of the interim analysis of our PCS499 Phase 2B clinical trial; and (iii) 39,786 RSUs vest upon the next capital raise(s) totaling a cumulative amount of at least $30 million.

At September 30, 2021, we had the following awards outstanding related to stock-based compensation:

Stock-based Compensation Awards Outstanding 

The weighted average exercise price of stock options and warrants outstanding at September 30, 2021 was $17.06 and $10.66, respectively. At September 30, 2021, we had warrants for the purchase of 303,725 shares of our common stock outstanding which expire at various dates through February 16, 2023. Warrants for the purchase of 153,725 shares of our common stock were issued in connection with PIPE transactions and other fundraising efforts we had over the last three years.