4. STOCK-BASED COMPENSATION

Accounting for Stock-Based Compensation

Stock Incentive Plans

The Company maintains the 2021 Stock Incentive Plan (the “2021 Plan”). All outstanding awards under the 2015 Stock Incentive Plan (the “2015 Plan”) remained in effect according to the terms of the 2015 Plan. Any shares that are currently available under the 2015 Plan and any shares underlying 2015 Plan awards which are forfeited, cancelled, reacquired by the Company or otherwise terminated are added to the number of shares available for grant under the 2021 Plan.

The fair value of each stock award is estimated on the grant date using the Black-Scholes option-pricing model. Volatility is based on the Company’s historical common stock volatility. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time. The expected term of stock options granted is based on an estimate of when options will be exercised in the future. Forfeitures are recorded as they occur. No dividends have been recorded historically.

As of September 30, 2023, there were an aggregate of 351,254 shares available for future grants under the 2021 Plan.

During the nine months ended September 30, 2023 and 2022, options granted were 1,542,000 and 340,250, respectively.

The following table summarizes the expense for stock-based compensation related to stock option grants:

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On January 17, 2023, the Company granted 609,000 non-statutory stock option awards at an exercise price of $1.68 per share to employees. These grants were contingent upon the approval of the increase in the number of shares available for issuance under the 2021 Plan that was approved by the stockholders at the Annual Meeting of Stockholders held on June 23, 2023. In accordance with the removal of the contingency, the Company began recognizing the expense for these awards beginning in June 2023.