NOTE D – STOCK-BASED COMPENSATION

Restricted Stock Units

The Company adopted the 2022 Stock Incentive Plan, (the “2022 Plan”), approved by its Board of Directors on July 25, 2022 and its stockholders on September 20, 2022. The 2022 Plan provides for the grant of any or all of the following types of awards: (a) stock options, (b) restricted stock, (c) deferred stock, (d) stock appreciation rights, and (e) other stock-based awards including restricted stock units.

As of March 31, 2023, there were 58,750 shares of common stock subject to outstanding awards under the 2022 Plan and 2,230,000 shares of common stock available for issuance under the 2022 Plan.

As of March 31, 2023, there were 512,500 shares of common stock subject to outstanding awards under the Company’s 2013 Stock Incentive Plan (“2013 Plan”). The Company discontinued issuing awards under its 2013 Plan as a result of the adoption of the 2022 Plan.

A summary of restricted stock unit activity for the three months ended March 31, 2023 is as follows (each restricted stock unit issued by the Company represents the right to receive one share of the Company’s common stock):

Restricted stock unit compensation expense was $161,000 and $55,000 for the three months ended March 31, 2023 and 2022, respectively. Stock-based compensation expense is included in general and administrative expenses on the unaudited condensed consolidated statement of operations and comprehensive loss.

The Company has an aggregate of $740,000 of unrecognized restricted stock unit compensation as of March 31, 2023 to be expensed over a weighted average period of 2.35 years.

All of the Company’s outstanding (unvested) restricted stock units have dividend equivalent rights. As of March 31, 2023 and December 31, 2022, there was $44,000 and $37,000, respectively, accrued for dividend equivalent rights which were included in other accrued expenses.