STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

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, 2021		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
Issued		—			—
Vested		(155,547	)		2.07
Canceled		—			—
Unvested at March 31, 2022	$	990,584		$	3.07

The 990,584 of unvested awards at March 31, 2022 consists of 300,760 restricted stock units and 689,824 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 March 31, 2022 and December 31, 2021 are as follows:

	March 31,		December 31,
	2022		2021
Exercise Price	$	2.00 to $51.80	$	2.00 to $51.80
Fair value of Company common stock	$	6.81 to $15.61	$	7.85 to $22.90
Dividend yield		0%		0%
Expected volatility	117% to 188%		117% to 188%
Risk Free interest rate	0.27% to 2.18%		0.27% to 1.59%
Expected life (years) remaining	0.59 to 9.97		0.84 to 10.00

Stock option activity for the period ended March 31, 2022 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
Granted		320,250		$	6.81		9.97
Exercised		—		$	—		—
Forfeited and expired		(899,332	)	$	14.63		8.99
Outstanding at March 31, 2022		3,467,891		$	12.59		8.66
Vested options at March 31, 2022		713,179		$	12.34		8.93

The weighted average exercise price and remaining contractual life of exercisable options as of March 31, 2022 is $12.34 and 8.93 years, respectively. The total aggregate intrinsic value of the exercisable options as of March 31, 2022 was approximately $301,336.

Stock Compensation Expense

The grant date fair value per share for the stock options granted was $6.17 and $13.36 for the three months ended March 31, 2022 and 2021, respectively.

On March 2, 2022, the Company and two advisors mutually agreed not to renew special advisor agreements between the advisors and the Company. Per the terms of the agreements, options to purchase 366,166 shares of common stock will continue to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors were not required to perform services to the Company beyond the March 2, 2022 non-renewal date. As a result, the Company recorded $5,417,043 of stock compensation expenses related to the options that will vest over the twelve months ending March 2, 2023 during March 2022.

At March 31, 2022, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $19,868,595, which the Company expects to recognize over a weighted-average period of approximately 3.30 years. Stock compensation expense for the three months ended March 31, 2022 and 2021 is as follows:

	For the Three Months Ended March 31,
	2022		2021
Services	$	23,907	$	—
Research and development		85,619		54,890
Sales and marketing		52,525		31,744
General and administrative		2,325,490		777,249
Separation expenses		5,417,043		—
Total	$	7,904,584	$	863,883

The total fair value of restricted shares vested during the period ended March 31, 2022 was $1,193,231.