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Note 6 - Stock-based Compensation

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Text Block]

6.	Stock-Based Compensation

2015 Equity Plan

The 2015 Equity Plan provides for increases to the number of shares reserved for issuance thereunder each January 1 equal to 4.0% of the total shares of the Company’s common stock outstanding as of the immediately preceding December 31, unless a lesser amount is stipulated by the Compensation Committee of the Company's board of directors. Accordingly, 2,560,618 shares were added to the reserve as of January 1, 2021, which shares may be issued in connection with the grant of stock-based awards, including stock options, restricted stock, restricted stock units, stock appreciation rights and other types of awards as deemed appropriate, in each case, in accordance with the terms of the 2015 Equity Plan. As of June 30, 2021, there were 1,181,629 shares available for future issuance under the 2015 Equity Plan.

The Company recorded stock-based compensation expense in the following expense categories of its unaudited interim consolidated statements of operations for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Research and development	$	59,567	$	91,896	$	92,567	$	188,426
General and administrative		237,713		21,548		385,993		116,398
Total stock-based compensation expense	$	297,280	$	113,444	$	478,560	$	304,824

The following table summarizes the activity related to all stock option grants for the six months ended June 30, 2021:

	Number of Options			Weighted average exercise price per share		Weighted average remaining contractual life (in years)		Aggregate intrinsic value
Balance at January 1, 2021		2,240,204		$	8.28
Granted		924,115			1.10
Forfeited		(111,432	)		0.91
Outstanding at June 30, 2021		3,052,887		$	6.37		8.8	$	219,228
Exercisable at June 30, 2021		1,563,224		$	11.54		8.1	$	195,252
Vested and expected to vest at June 30, 2021		3,052,887		$	6.37		8.8	$	219,228

The weighted average grant date fair value of stock option awards granted during the six months ended June 30, 2021 was $1.05. The total fair value of options vested during the three months ended June 30, 2021 and 2020 was $0.1 million and $0.1 million, respectively. The total fair value of options vested during the six months June 30, 2021 and 2020 was $0.3 million and $0.3 million, respectively. No options were exercised during any of the periods presented. At June 30, 2021, there was $1.1 million of unrecognized compensation expense that will be recognized over a weighted-average period of 2.22 years. During the six months ended June 30, 2021, the Company granted 385,267 performance-based stock options with an exercise price of $1.11 per share, subject to vesting based on the satisfaction of specified performance criteria. Compensation expense for the performance-based awards is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. The Company recorded stock-based compensation expense of approximately $0.1 million and $0.2 million during the three and six months ended June 30, 2021, for service-based awards and performance conditions deemed probable of achievement and/or achieved.

Options granted were valued using the Black-Scholes option-pricing model and the weighted average assumptions used to value the options granted during the six months ended June 30, 2021 and 2020 were as follows:

	2021			2020
Expected term (in years)		10			5.59
Risk-free interest rate		1.5	%		1.3	%
Expected volatility		124.5	%		115.1	%
Dividend yield		—	%		—	%

Restricted Stock Awards

As of the six months ended June 30, 2021, the Company has granted an aggregate of 153,000 restricted stock awards to members of the board of directors of the Company. The shares begin to vest 18 months after the respective grant date. The Company recognized approximately $5,000 and $4,000 in expense related to these awards during the three months ended June 30, 2021 and 2020, respectively. The Company recognized approximately $10,000 and $8,000 in expense related to these awards during the six months ended June 30, 2021 and 2020, respectively. At June 30, 2021, there was approximately $72,000 of unrecognized compensation cost that will be recognized over a weighted average period of 1.96 years.