Note 11. STOCK-BASED COMPENSATION

The Company grants options under its 2014 Equity Incentive Plan (the “Plan”). Under the Plan, the Company is authorized to grant options for up to 1.1 million shares of Common Stock. The Company has reserved 1.0 million shares to be used under the Plan. Options may be granted to employees, the Company’s board of directors and external consultants who provide services to the Company. Options granted under the Plan have vesting schedules with terms of one to four years and become fully exercisable based on specific terms imposed at the date of grant. The Plan will terminate according to the respective terms of the Plan in September 2026.

The Company has recorded stock-based compensation expense (credit) related to the issuance of stock option awards in the following line items in the accompanying condensed consolidated statement of operations:

SUMMARY OF STOCK-BASED COMPENSATION EXPENSE RECOGNIZED FOR STOCK OPTION AWARDS 

The following table summarizes stock option activity under the Plan:

SUMMARY OF OPTION ACTIVITY 

As of September 30, 2022, there was no unrecognized compensation cost related to non-vested stock options. During the nine months ended September 30, 2022, 64,848 options were exercised for proceeds of approximately $75,000. During the nine months ended September 30, 2021, no options were exercised.

During the nine months ended September 30, 2022, the Company issued options to purchase 7,142 shares of Common Stock to a non-employee. The per share weighted-average fair value of the options granted during 2022 was estimated at $2.84 on the date of grant.

During the nine months ended September 30, 2022, the Company issued restricted stock units (RSUs) for 14,999 shares of Common Stock to an employee and a non-employee. The shares vest in equal monthly installments over terms of between immediately to one year, subject to the employee and non-employee providing continuous service through the vesting date. During the nine months ended September 30, 2022, approximately 21,000 shares vested from RSUs previously issued.

During the nine months ended September 30, 2021, the Company issued options to purchase 29,279 shares of Common Stock and 11,752 RSUs. The per share weighted-average fair value of the options granted during 2021 was estimated at $1.85 on the date of grant.

The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the grants issued during the nine months ended September 30, 2022 and 2021, respectively:

SCHEDULE OF FAIR VALUE ASSUMPTIONS