NOTE 17. SHARE-BASED COMPENSATION

In 2015, the Company’s Board of Directors adopted, and stockholders approved, the Journey Medical 2015 Stock Plan (the “Plan”) authorizing the Company to grant up to 4,642,857 shares of Common Stock to eligible employees, directors, and consultants in the form of restricted stock, restricted stock units (“RSUs”), stock options and other types of grants. The amount, terms, and exercisability provisions of grants are determined by the Board of Directors. At the Company’s 2022 Annual Meeting on June 21, 2022, the Company’s stockholders approved an amendment to the the Plan to increase the number of shares of common stock issuable under the Plan by 3,000,000 to 7,642,857. As of June 30, 2022, 3,289,345 shares were available for issuance under the Plan.

Total compensation cost charged against operations related to the above plan for the three-month periods ended June 30, 2022 and 2021 was $0.7 million and $11,019, respectively. Total compensation cost charged against operations related to the above plan for the six-month periods ended June 30, 2022 and 2021 was $1.5 million and $32,505, respectively. The Company records stock compensation expense as a component of selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

Stock Options

The following table summarizes the Company’s stock option activities:

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For the three and six-month periods ended June 30, 2022, the Company issued 133,149 shares of common stock upon the exercise of outstanding stock options and received proceeds of $111,055. For the three and six-month periods ended June 30, 2021, the Company issued 10,000 shares of common stock upon the exercise of outstanding stock options and received proceeds of $6,800. For the three-month periods ended June 30, 2022 and 2021, $4,065 and $11,019, respectively, of stock option compensation expense was charged against operations. For the six-month periods ended June 30, 2022 and 2021, $10,903 and $32,505, respectively, of stock option compensation expense was charged against operations. As of June 30, 2022, the Company had unrecognized stock-based compensation expense related to all unvested options of $8,341 which the Company expects to recognize over a weighted-average period of approximately 0.64 years.

Restricted Stock Units

For the three and six-month periods ended June 30, 2022, the Company issued 105,000 and 107,000 shares of common stock, respectively, upon the vesting of RSU’s amounting to $383,475 and $392,855, respectively, in total aggregate fair market value. The Company did not issue any shares of common stock upon the vesting of RSU’s for the three and six-month periods ended June 30, 2021. For the three and six-month periods ended June 30, 2022, approximately $0.7 million and $1.5 million, respectively, of RSU compensation cost was charged against operations. For the three and six-month periods ending June 30, 2021 zero cost for RSU compensation was charged against operations as the unvested RSUs for these periods contingently vested upon the Company’s IPO on November 12, 2021. The Company charged $2.4 million against operations relating to the vesting of these awards in the fourth quarter

of 2021. At June 30, 2022, approximately 1,319,030 of RSU’s remained unvested and there was approximately $3.0 million of unrecognized compensation cost related to RSUs.

The following table summarizes the activity related to the Company’s RSUs for the six-month period ended June 30, 2022:

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