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STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

Note 12

STOCK-BASED COMPENSATION

Restricted Stock Awards and Restricted Stock Units

Unvested equity interests of MOR were converted into restricted Company common stock based upon the exchange ratio of 1.7776 shares of Company common stock for each 1 MOR unit, subject to any adjustments required under the Contribution Agreement. The information regarding the 2020 Plan below is presented as though the combination occurred as of the beginning of the periods presented.

	Number of Restricted Shares and Units			Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2020		1,237,396		$	0.62
Issued		2,191,869			1.21
Vested		1,729,589			0.72
Canceled		—			—
Unvested at December 31, 2020		1,699,676			1.28
Issued		454,000			11.71
Vested		907,545			0.03
Canceled		(100,000	)		12.18
Unvested at December 31, 2021		1,146,131		$	3.28

The 1,146,131 of unvested awards at December 31, 2021 consists of 326,750 restricted stock units and 819,381 shares of restricted stock.

Stock Options

As part of the Merger (see Note 4), the Company assumed the Helix TCS, Inc. Omnibus Stock Incentive Plan and the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan, each as amended, pursuant to which options exercisable at prices between $2.00 and $51.80 per share for 455,089 shares of Company common stock were outstanding. The value attributable to service subsequent to the Merger will be recognized as compensation cost by the Company.

The fair value of the stock options was estimated using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgement. The assumptions at the inception date are as follows:

	December 31,
	2021
Exercise Price	$	2.00 to $51.80
Fair value of Company common stock	$	7.85 to $22.90
Dividend yield		0%
Expected volatility	117% to 188%
Risk Free interest rate	0.27% to 1.59%
Expected life (years) remaining	0.84 to 10.00

Stock option activity for the period ended December 31, 2021 is as follows:

	Shares Underlying Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2021		—		$	—		—
Options assumed in Helix Merger		455,089		$	15.13		3.24
Granted		3,893,714		$	12.73		9.31
Exercised		(29,937	)	$	6.03		1.02
Forfeited and expired		(271,893	)	$	7.31		6.65
Outstanding at December 31, 2021		4,046,973		$	14.25		8.75
Vested options at December 31, 2021		526,352		$	15.13		3.24

The weighted average exercise price and remaining contractual life of exercisable options as of December 31, 2021 is $15.13 and 3.24 years, respectively. The total aggregate intrinsic value of the exercisable options as of December 31, 2021 was approximately $455,323.

Stock Compensation Expense

The grant date fair value per share for the stock options granted was $11.95 and $0.02 for the years ended December 31, 2021 and 2020, respectively.

At December 31, 2021, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $38,135,809, which the Company expects to recognize over a weighted-average period of approximately 3.28 years. Stock compensation expense for the years ended December 31, 2021 and 2020 is as follows:

	Year Ended December 31,
	2021		2020
Services	$	36,013	$	—
Research and development		136,936		13,956
Sales and marketing		451,846		4,884
General and administrative		8,675,648		9,489
Total	$	9,300,443	$	28,329

Total intrinsic value of options exercised in the year ended December 31, 2021 was $207,637. The total fair value of restricted shares vested during the year ended December 31, 2021 was $2,568,884.