Annual report pursuant to Section 13 and 15(d)

Stock and Employee Benefit Plans

v3.22.0.1
Stock and Employee Benefit Plans
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock and Employee Benefit Plans Stock and Employee Benefit Plans
Employee, Director and Consultant Equity Incentive Plans
At the Annual Shareholder Meeting, held on June 23, 2020, the shareholders approved the 2020 Employee, Director and Consultant Equity Incentive Plan, or the 2020 Plan. The 2020 Plan originally permitted the Company to issue up to 3,500,000 shares of common stock pursuant to awards granted under the 2020 Plan. Upon approval of the 2020 Plan, the
2019 Employee, Director and Consultant Equity Incentive Plan, or the 2019 Plan, was terminated; all unissued options were canceled and no additional awards will be made thereunder. All outstanding awards under the 2019 Plan will remain in effect and any awards forfeited from the outstanding awards will be allocated back into the 2020 Plan. The 2020 Plan, similar to the 2019 Plan, provided for the grant of stock options, restricted and unrestricted stock awards, and other stock-based awards to employees of the Company, non-employee directors of the Company, and certain other consultants performing services for the Company as designated by either the Board of Directors or the compensation committee of the Board of Directors. At the 2021 Annual Meeting of Stockholders, held on June 25, 2021, the Company’s stockholders approved the first amendment to the 2020 Plan to add 2,250,000 shares for issuance under the 2020 Plan, which increased the total permitted for issuance under the 2020 Plan to 5,750,000.
There were approximately 1,579,678 shares remaining and available for grant under the 2019 Plan that terminated pursuant to the approval of the 2020 Plan. The 2020 Plan permits the Company to issue up to 5,750,000 shares reserved for issuance pursuant to the 2020 Plan and any additional shares which may be issued if awards outstanding under the Registrant’s 2014, 2016, 2018 and 2019 Plans are canceled or expire.
The Company’s stock options have a maximum term of 10 years from the date of grant. Stock options granted may be either incentive stock options or nonqualified stock options and the exercise price of stock options must be at least equal to the fair market value of the common stock on the date of grant. The Company’s general policy is to issue common shares upon the exercise of stock options.
The Company estimates the fair value of each stock award on the grant date using the Black-Scholes option-pricing model based on the following assumptions:
  Years Ended December 31,
  2021 2020
Risk free interest rate
0.46% - 1.20%
0.33% - 1.53%
Expected term (in years)
5.31 - 5.73
5 - 5.73
Dividend yield —  — 
Expected volatility
75.0% - 81.7%
70.0% - 75.8%
The weighted-average fair value of the 3,182,696 and 2,311,481 options granted during the years ended December 31, 2021 and 2020 was $2.04 and $1.92, respectively. As of December 31, 2021, there were 3,282,399 shares available for future grant under the 2020 Plan.
The following table summarizes stock option activity for employees and non-employees:
Number of
Options		 Weighted-
Average
Exercise
Price		 Weighted-
Average
Remaining
Contractual
Life		 Aggregate
Intrinsic
Value
(in thousands)
Outstanding, December 31, 2020 9,591,123  $ 3.44  $ 2,303 
Granted 2,822,696  3.05  — 
Exercised 482,115  2.14  1,106 
Canceled 379,991  4.96  102 
Outstanding, December 31, 2021 11,551,713  $ 3.34  6.71 years $ 11,402 
Vested or expected to vest, December 31, 2021 11,551,713  $ 3.34  6.71 years $ 11,402 
Exercisable, December 31, 2021 7,376,177  $ 3.45  5.52 years $ 7,964 
Periodically, the Company grants inducement options, which are awards outside of approved stock option plans, and which are material awards to the executive officers or other personnel entering senior leadership roles with the Company. The terms of inducement option awards were substantially the same as those issued under our 2020 Plan. These awards are excluded from the table above. The following table summarizes stock option activity for these inducement options (in thousands):
Number of
Options		 Weighted-
Average
Exercise
Price		 Weighted-
Average
Remaining
Contractual
Life		 Aggregate
Intrinsic
Value
(in thousands)
Outstanding, December 31, 2020 420,313  $ 5.00  $ — 
Granted 360,000  $ 3.48  $ — 
Canceled or Expired 120,313  $ 5.87  $ — 
Outstanding, December 31, 2021 660,000  $ 4.01  8.71 years $ 108 
Vested or expected to vest, December 31, 2021 660,000  $ 4.01  8.71 years $ 108 
Exercisable, December 31, 2021 168,750  $ 4.65  7.66 years $ — 
Employee Stock Purchase Plans
The 2018 ESPP provides eligible employees with the opportunity, through regular payroll deductions, to purchase shares of the Company’s common stock at 85% of the lower closing market price of the common stock at the beginning date or ending date of each purchase period. The plan includes two six-month purchase periods per year beginning in both June and December. The Company has reserved 500,000 shares of common stock for the administration of the 2018 ESPP. Total shares purchased under the plan were 64,257 and 69,544 for the years ended December 31, 2021 and 2020, respectively. The fair value of shares expected to be purchased under the 2018 ESPP was determined using the Black-Scholes model with the following assumptions:
  Years Ended December 31,
  2021 2020
Risk free interest rate
0.04% - 0.10%
0.10% - 0.18%
Expected term (in years) 0.5 years 0.5 years
Dividend yield —  — 
Expected volatility
60.46% - 131.21%
74.36% - 120.89%
Total Stock-based Compensation Expense
Total stock-based compensation expense is recorded in operating expenses based upon the functional responsibilities of the individuals holding the respective options as follows (in thousands):
  Years Ended December 31,
  2021 2020
Research and development $ 2,274  $ 2,394 
General and administrative 2,941  2,696 
Total stock-based compensation $ 5,215  $ 5,090 
As of December 31, 2021, the total unrecognized compensation cost related to all non-vested awards was $8.1 million of which $1.2 million are for inducement options. The Company expects to recognize the compensation cost over a remaining weighted-average period of 2.64 years.