Note 9 - Equity Compensation to Officers and Board of Directors

As part of employment agreements with its Chief Executive Officer (CEO) and its Chief Financial Officer (CFO), these officers were to receive a fully vested stock grant equal to aggregate of 10% and 1.5% of the fully diluted shares of common stock of the Company (calculated with the exclusion of the current stock holdings of the CEO, Mr. Cataldo, and calculated with the inclusion of the current stock holdings the CFO, Mr. Handelman) upon conversion of options, warrants and Convertible Notes in association with a national markets qualified financing as consideration for entering into the Agreement (with such stock to vest and be delivered within 30 days after the national markets qualified financing). In addition, the Company also granted similar equity compensation to members of the Company’s Board of Directors wherein these directors were to receive stock grant equal to 1% and 1.25% of the fully diluted shares of common stock of the Company. Pursuant to the agreement, approximately 75% of the common stock to be issued vested immediately while the remaining 25% will vest over a period of two years.

On February 16, 2021, the Company completed its equity offering and listed its shares of common stock on the Nasdaq Capital Markets (see Note 7). As such, 4,379,407 shares of its common stock were granted to these officers and directors which had a fair value of $18,621,000. Pursuant to current accounting guidelines, as the grant of the common stock is subject to milestone or performance condition, the Company measured the fair value of the common stock on the respective date of the agreement, and then such award was recorded as compensation expense as the milestone or performance condition is met and in accordance with its vesting term of the grant.

During the period ended June 30, 2021, the Company recognized stock compensation of $14,873,000 to account for equity compensation to officers and directors of the 3,739,295 shares that vested.

As of June 30, 2021, the unvested and unissued common stock totaled 640,112 shares of common stock with an estimated fair value of $3,748,000 that will be recognized as stock compensation in future periods based upon the remaining vesting term of the grant.