7. Share-Based Compensation

In April 2020, the Company adopted the 2020 Omnibus Equity Incentive Plan (the “Plan”). There were no shares available for issuance under the Plan as of December 31, 2022. On January 1, 2023, the total number of shares authorized under the Plan increased to 318,561. The Plan increases the amount of shares issuable under the Plan by four percent of the outstanding shares of common stock on January 1, each year. The Plan permits the granting of share-based awards, including stock options, restricted stock units and awards, stock appreciation rights and other types of awards as deemed appropriate, in each case, in accordance with the terms of the Plan. The terms of the awards are determined by the Company’s Board of Directors.

Restricted stock units

In July of 2020, 46,703 restricted stock units (“RSUs”) were granted, 50% of which vested on April 2, 2021 and the remaining 50% vested on April 2, 2022. In March of 2021, an additional 3,357 RSUs were granted, 50% of which vested on March 25, 2022 and the remaining 50% vest on March 25, 2023. In December of 2021, 46,478 RSUs were granted, 100% of which vest on January 1, 2023. In December of 2022, 172,672 RSUs were granted, 100% of which vest on January 1, 2024. Any unvested RSUs will be forfeited upon termination of services. The fair value of an RSU is equal to the fair market value of the Company’s common stock on the date of grant. RSU expense is amortized straight-line over the vesting period.

The Company recorded share-based compensation expense associated with the RSUs in its accompanying consolidated statements of operations as follows:

Schedule of Share-based Compensation Expense 

The following table summarizes RSU activity under the Plan:

Schedule of Restricted Stock Units Activity 

As of December 31, 2022, total unrecognized compensation expense relating to unvested RSUs granted was $0.2 million, which is expected to be recognized over a weighted-average period of less than one year.

In January 2023, 121,366 of the RSUs issued in December 2022 were cancelled and reissued as restricted shares of the Company’s common stock (“Restricted Stock Awards” or “RSAs”). The restricted shares may not be sold or otherwise transferred until such shares become vested. The RSAs have the same vesting conditions as the original RSUs.