On February 27, 2020, the Company adopted the MindMed Stock Option Plan (the “Plan”) to advance the interests of the Company by providing employees, contractors and directors of the Company a performance incentive for continued and improved service with the Company. The Plan sets out the framework for determining eligibility as well as the terms of any stock-based compensation granted. The plan was approved by the shareholders as part of the Arrangement and is authorized to issue 15% of the Company's outstanding Common Shares under the terms of the plan.

The fair value of options issued is estimated using the Black-Scholes-Merton option pricing model on the date of grant with the following assumptions:


	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2022	2021	2022	2021
Share price	$1.00 CAD - 1.19	$2.73 CAD - 4.46	$1.00 CAD - 1.78	$2.73 CAD - 4.46
Expected volatility	92.73% - 97.92%	71.62% - 102.89%	92.73% - 97.92%	71.62% - 102.89%
Risk-free rate	2.71% - 2.78%	0.02% - 0.50%	1.79% - 2.78%	0.02% - 0.50%
Expected life	2.5 - 3.6 years	0.3 - 3.6 years	2.5 - 3.6 years	0.3 - 3.6 years
Expected dividend yield	0%	0%	0%	0%

The following table summarizes the Company’s stock option activity:


	Number of Options			Weighted Average Exercise Price (CAD$)		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (CAD$)
Options outstanding – December 31, 2021		23,093,044		$	1.86		3.8	$	13,610,348
Issued		10,382,116			1.43
Exercised		(442,708	)		0.45				488,177
Forfeited		(666,228	)		2.49
Expired		(713,669	)		3.00
Options outstanding – June 30, 2022		31,652,555		$	1.70		3.9	$	3,755,347
Options vested and exercisable at June 30, 2022		7,951,967		$	1.57		3.8	$	2,093,667

The weighted average grant date fair value of options granted during the six months ended June 30, 2022 was CAD$0.96. The aggregated fair value of options vested during the six months ended June 30, 2022 was $5.7 million. The expense recognized related to options during the three and six months ended June 30, 2022 was $1.9 million and $4.0 million, respectively.

The Company has adopted a Performance and Restricted Share Unit (“RSU”) Plan to advance the interests of the Company by providing employees, contractors and directors of the Company a performance incentive for continued and improved service with the Company. The plan sets out the framework for determining eligibility as well as the terms of any stock-based compensation granted. The plan was approved by the shareholders as part of the Arrangement. The fair value has been estimated based on the closing price of the stock on the day prior to the grant.


	Number of RSUs			Weighted Average Grant Date Fair Value (CAD$)
Balance December 31, 2021		9,667,217		$	3.00
Granted		7,812,180			1.44
Vested and unissued		(3,175,731	)		2.54
Cancelled		(334,599	)		3.56
Balance June 30, 2022		13,969,067		$	2.22

The fair market value of RSUs vested during the six months ended June 30, 2022 was $4.0 million. The expense recognized related to RSUs during the three and six months ended June 30, 2022 was $2.3 million and $3.9 million, respectively.

On April 16, 2021, the Company adopted the MindMed Director's Deferred Share Unit Plan (the "DDSU Plan"). The DDSU Plan sets out a framework to grant non-executive directors DDSU's which are cash settled awards. The DDSU Plan states that the fair market value of one DDSU shall be equal to the volume weighted average trading price of a Common Share on the NEO Exchange for the five business days immediately preceding the date upon which any payment is made to settle the DDSUs. The DDSU's generally vest ratably over twelve months after grant and are settled within 90 days of the date the director ceases service to the Company.


	Number of DDSUs
Balance December 31, 2021		456,260
Issued		2,113,667
Settled		—
Cancelled		(370,491	)
Balance June 30, 2022		2,199,436

For the six months ended June 30, 2022, $0.1 million of stock-based compensation expense was recognized relating to the revaluation of the vested DDSUs, recorded in general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss. There were 596,550 DDSUs vested as of June 30, 2022. The liability associated with the outstanding vested DDSUs was $0.1 million as of June 30, 2022 and was recorded to accrued expenses in the accompanying condensed consolidated balance sheet.

Stock-based compensation expense for all equity arrangements for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	1,779	$	2,427	$	3,784	$	2,768
General and administrative		2,474		30,561		4,261		31,499
Total stock-based compensation expense	$	4,253	$	32,988	$	8,045	$	34,267

As of June 30, 2022, there was approximately $19.9 million of total unrecognized stock-based compensation expense, related to unvested options granted to employees under the Company’s stock option plan that is expected to be recognized over a weighted average period of 3 years. As of June 30, 2022, there was approximately $21.7 million of total unrecognized stock-based compensation expense, related to RSUs granted to employees under the Company’s stock option plan that is expected to be recognized over a weighted average period of 3.1 years.