Stock-Based Compensation | 11. Stock-Based Compensation 2021 Equity Incentive Plan In January 2022, in connection with the Business Combination, the Board of Directors and the Company’s stockholders adopted the 2021 Equity Incentive Plan (the “2021 Plan”) and reserved 36,983 authorized shares of common stock for issuance under the plan. The 2021 Plan is administered by the Board of Directors. Vesting periods and other restrictions for grants under the 2021 Plan are determined at the discretion of the Board of Directors. Grants to employees, officers, directors, advisors, and consultants of the Company typically vest over one to four years. In addition, the number of shares of stock available for issuance under the 2021 Plan will be automatically increased each January 1, and began on January 1, 2022, by 10% of the aggregate number of outstanding shares of our common stock from the first day of the preceding calendar year to the first day of the current calendar year or such lesser number as determined by our board of directors. On January 1, 2023, after effecting the Reverse Split the total shares available for issuance under the 2021 Equity Plan was increased to 68,288 authorized shares of common stock. Under the 2021 Plan, stock options and stock appreciation rights are granted at exercise prices determined by the Board of Directors which cannot be less than 100% of the estimated fair market value of the common stock on the grant date. Incentive stock options granted to any stockholders holding 10% or more of the Company’s equity cannot be granted with an exercise price of less than 110% of the estimated fair market value of the common stock on the grant date and such options are not exercisable after five As of September 30, 2023, there were 33,283 shares available for future grant under the 2021 Plan. Restricted Stock Units At the Closing Date of the Business Combination, all Revelation Sub RSU award holders received a Rollover RSU award in exchange for each RSU award of Revelation Sub that vest in accordance with the original terms of the award. The Company determined this to be a Type I modification but did not record any incremental stock -based The Rollover RSU awards have time -based -based -based -based As of September 30, 2023 and December 31, 2022, the Company has a total of 3,006 and 7,290 Rollover RSU awards for shares of common stock outstanding, respectively. As of September 30, 2023, 1,371 Rollover RSU awards have fully vested but are unissued and no Rollover RSU awards have been forfeited. As of September 30, 2023, 1,635 Rollover RSU awards will vest and be issued over the next 1.4 years. Each Rollover RSU award converts to one share of common stock. Stock Options The Company has granted stock options which (i) vest fully on the date of grant; (ii) vest 25% on the one year anniversary of the grant date or the employees hiring date, with the remainder vesting quarterly thereafter; or (iii) vest quarterly over one year, for grants to Board of Directors, officers and employees. Stock options have a maximum term of 3 or 10 years. The activity related to stock options, during the nine months ended September 30, 2023 is summarized as follows: Shares Weighted- average Exercise Price Weighted- average Remaining Contractual Term (Years) Outstanding at December 31, 2022 9,581 $ 31.91 Granted 25,424 1.19 Exercised — — Expired and forfeited — — Outstanding at September 30, 2023 35,005 $ 9.60 8.2 Exercisable at September 30, 2023 32,514 $ 6.58 8.2 For the nine months ended September 30, 2023, the weighted -average -Scholes -Scholes -average Volatility 126.0 % Expected term (years) 5.03 Risk-free interest rate 3.09 % Expected dividend yield 0.0 % Expected volatility is based on the historical volatility of shares of the Company’s common stock. In determining the expected term of stock options, the Company uses the “simplified” method. Under this method, the expected term is presumed to be the midpoint between the average vesting date and the end of the contractual term. The risk -free -Scholes -based Stock-Based Compensation Expense For the three and nine months ended September 30, 2023 and 2022, the Company recorded stock -based Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 General and administrative: RSU awards $ 22,384 $ 23,928 $ 67,150 $ 108,040 Stock Options 7,216 (10,912 ) 48,988 36,784 General and administrative stock-based compensation expense 29,600 13,016 116,138 144,824 Research and development: RSU awards 1,898 6,021 5,694 39,608 Stock Options 598 21,638 1,794 84,323 Research and development stock-based compensation expense 2,496 27,659 7,488 123,931 Total stock-based compensation expense $ 32,096 $ 40,675 $ 123,626 $ 268,755 As of September 30, 2023, there was $131,185 and $75,191 of unrecognized stock -based -based | 11. Stock-Based Compensation 2020 Equity Incentive Plan and 2021 Equity Incentive Plan Prior to the Merger, Revelation Sub adopted the Revelation Biosciences, Inc. 2020 Equity Incentive Plan (the “2020 Plan”) on October 1, 2020 for the issuance of stock -based In January 2022, in connection with the Business Combination, the Board of Directors adopted the 2021 Equity Incentive Plan (the “2021 Plan”) and reserved 36,983 authorized shares of common stock the Company could issue. The 2021 Plan is administered by the Board of Directors. Vesting periods and other restrictions for grants under the 2021 Plan are determined at the discretion of the Board of Directors. Grants to employees, officers, directors, advisors, and consultants of the Company typically vest over one to four years. In addition, the number of shares of stock available for issuance under the 2021 Plan will be automatically increased each January 1, beginning on January 1, 2022, by 10% of the aggregate number of outstanding shares of our common stock from the first day of the preceding calendar year to the first day of the current calendar year or such lesser number as determined by our board of directors. On January 1, 2023, after effecting the Reverse Split the total shares available for issuance under the 2021 Equity Plan was increased to 68,288 authorized shares of common stock. Under the 2021 Plan, stock options and stock appreciation rights are granted at exercise prices determined by the Board of Directors which cannot be less than 100% of the estimated fair market value of the common stock on the grant date. Incentive stock options granted to any stockholders holding 10% or more of the Company’s equity cannot be granted with an exercise price of less than 110% of the estimated fair market value of the common stock on the grant date and such options are not exercisable after five As of December 31, 2022, there were 58,707 Restricted Stock Units At the Closing Date of the Business Combination, all Revelation Sub RSU award holders received a Rollover RSU award in exchange for each RSU award of Revelation Sub that vest in accordance with the original terms of the award. The Company determined this to be a Type I modification but did not record any incremental stock -based The Rollover RSU awards have time -based -based -based -based As of December 31, 2022 and December 31, 2021, the Company has a total of 7,290 and 13,154 Rollover RSU awards for shares of common stock outstanding, respectively. During the year ended December 31, 2022, 3,435 Rollover RSU awards have fully vested and been issued and 2,429 Rollover RSU awards have been forfeited. As of December 31, 2022, 7,290 Rollover RSU awards will vest and be issued over the next 2.4 years. Each Rollover RSU award converts to one share of common stock. Stock Options The Company has granted stock options which vest 25% on the one year anniversary of the grant date or the employees hiring date, with the remainder vesting quarterly thereafter for grants to officers and employees. Stock options have a maximum term of 10 years. On July 29, 2022, in connection with the release of 9 employees, the Board of Directors granted 5,590 stock options for shares of common stock that vest 100% on the date of grant. The stock options have a maximum term of 3 years. The activity related to stock options, during the year ended December 31, 2022 is summarized as follows: Shares Weighted- Weighted- Outstanding at December 31, 2021 — $ — Granted 15,708 38.57 Exercised — — Expired and forfeited (6,127 ) 49.00 Outstanding at December 31, 2022 9,581 $ 31.91 3.5 Exercisable at December 31, 2022 5,590 $ 19.71 2.6 For the year ended December 31, 2022, the weighted -average -Scholes -Scholes -average Volatility 96.5 % Expected term (years) 5.00 Risk-free interest rate 2.27 % Expected dividend yield 0.0 % Expected volatility is based on the historical volatility of shares of the Company’s common stock. In determining the expected term of stock options, the Company uses the “simplified” method. Under this method, the expected term is presumed to be the midpoint between the average vesting date and the end of the contractual term. The risk -free -Scholes -based Stock-Based Compensation Expense For the years ended December 31, 2022 and 2021, the Company recorded stock -based Year Ended 2022 2021 General and administrative: RSU awards $ 130,689 $ 412,214 Stock Options 44,000 — General and administrative stock-based compensation expense 174,689 412,214 Research and development: RSU awards 41,506 58,664 Stock Options 84,921 — Research and development stock-based compensation expense 126,427 58,664 Total stock-based compensation expense $ 301,116 $ 470,878 As of December 31, 2022, there was $204,030 and $98,633 of unrecognized stock -based -based |