Note 12. STOCK-BASED COMPENSATION

The Company grants options and restricted stock awards under its 2014 Equity Incentive Plan (the “Plan”). Under the Plan, the Company is authorized to grant options or restricted stock for up to 2,000,000 shares of Common Stock. On June 6, 2023, the Company received stockholder approval to increase the number of authorized shares from 1,142,857 to 2,000,000. Options or restricted stock awards may be granted to employees, the Company’s board of directors, and external consultants who provide services to the Company. Options and restricted stock awards granted under the Plan have vesting schedules with terms of one to three 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 March 2024.

The Company has recorded stock-based compensation expense related to the issuance of restricted stock 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, 2023, there was no unrecognized compensation cost related to non-vested stock options.

During the nine months ended September 30, 2023, no options were exercised. During the nine months ended September 30, 2022, 64,848 options were exercised for proceeds of $74,900. During the nine months ended September 30, 2023, no options were issued by the Company to purchase shares of Common Stock. During the nine months ended September 30, 2022, the Company issued options to purchase 7,142 shares of Common Stock. The per share weighted-average fair value of the options granted during 2022 was estimated at $2.84 on the date of grant.

The following table summarizes restricted stock award activity under the Plan:

 SUMMARY OF RESTRICTED STOCK AWARD 

During the nine months ended September 30, 2023, the Company issued restricted stock awards (RSAs) for 326,068 shares of Common Stock to employees, non-employees, and the board of directors. The shares vest in equal monthly installments over terms of between immediately up to three years, subject to the employees and non-employees providing continuous service through the vesting date. During the nine months ended September 30, 2023, 42,825 shares vested from RSAs granted prior to January 1, 2023, and 227,760 shares vested from RSAs granted during the nine months ended September 30, 2023.

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

The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the options grants issued during the nine months ended September 30, 2022. No stock options have been issued during the nine months ended September 30, 2023:

 SCHEDULE OF FAIR VALUE ASSUMPTIONS