11. Stock-based Compensation

In January 2019, the Company’s Board of Directors adopted the 2019 Stock Incentive Plan (the “Plan”). A total of 2,000,000 shares of common stock has been authorized and reserved for issuance under the Plan in the form of incentive or nonqualified stock options and stock awards. A committee appointed by the Board of Directors of the Company determines the terms and conditions of each grant under the Plan. Employees, directors, and consultants are eligible to receive stock options and stock awards under the Plan. The aggregate number of shares available under the Plan and the number of shares subject to outstanding options may be increased or decreased by the Plan administrator to reflect any changes in the outstanding common stock by reason of any recapitalization, reorganization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock or similar transaction.

The exercise price of incentive stock options may not be less than the fair market value of the common stock at the date of grant. The exercise price of incentive stock options granted to individuals that own greater than 10% of the voting stock may not be less than 110% of the fair market value of the common stock at the date of grant.

The term of each incentive and nonqualified option is based upon such conditions as determined by the option agreement; however, the term can be no more than ten years from the date of the grant. In the case of an incentive stock option granted to an optionee who, at the time the option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary, the term of the option will be such shorter term as may be provided in the option agreement, but not more than five years from the date of the grant.

Stock Options

A summary of the Company’s stock option activity under the Plan for the period ended March 31, 2021 is as follows:


				Weighted-
				Average
		Weighted-		Remaining
		Average		Contract	Aggregate
	Number of	Exercise		Life	Intrinsic
	Options	Price		(In Years)	Value
Outstanding at December 31, 2020	15,000	$	10.00	8.0	$	—
Granted	—		—
Exercised	—		—
Canceled/forfeited	—		—
Outstanding at March 31, 2021	15,000	$	10.00	7.8	$	—
Expected to vest at March 31, 2021	15,000	$	10.00	7.8	$	—
Exercisable at March 31, 2021	—	$	—	—	$	—

At March 31, 2021, total remaining stock-based compensation expense for unvested stock options is approximately $40,000.

Restricted stock

The Company issued restricted stock units to employees of the Company. The following table summarizes the unvested restricted stock units for the period ended March 31, 2021:


		Weighted
	Number of	Average
	Shares	Grant Date
	Outstanding	Fair Value
Unvested at December 31, 2020	256,000	$	10.00
Granted	—		—
Vested	—		—
Forfeited	(35,000)		—
Unvested at March 31, 2021	221,000	$	10.00

The restricted stock units and stock options granted are subjected to vesting conditions that is contingent upon the closing of an initial public offering of the Company. Given the restriction on vesting, no stock-based compensation expense was recognized for the periods ended March 31, 2021 and December 31, 2020. The restricted stock units and stock options granted began vesting on April 15, 2021, which is the date of closing of the Company’s initial public offering. The Company will start recognizing stock-based compensation over the vesting period, which is generally over 3 years for the restricted stock units and 1 year for the stock options. At March 31, 2021, total remaining stock-based compensation expense for unvested restricted stock units is approximately $2.2 million.