Note 8 - Stock-based Compensation

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

8. 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, 81,531 shares were added to the reserve as of January 1, 2022, 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, 2022, there were 42,461 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,
	2022		2021		2022		2021
Research and development	$	58,892	$	59,567	$	117,785	$	92,567
General and administrative		219,238		237,713		438,476		385,993
Total stock-based compensation expense	$	278,130	$	297,280	$	556,261	$	478,560

The following table summarizes the activity related to all stock option grants for the six months ended June 30, 2022:

	Number of Options			Weighted average exercise price per share		Weighted average remaining contractual life (in years)		Aggregate intrinsic value
Balance at January 1, 2021		72,454		$	265.85
Granted		56,300			11.40
Forfeited		(5,612	)		188.18
Expired		(260	)		1,575
Outstanding at June 30, 2022		122,882		$	149.96		8.8	$	—
Exercisable at June 30, 2022		60,688		$	283.73		8.1	$	—
Vested and expected to vest at June 30, 2022		122,882		$	149.96		8.8	$	—

The weighted average grant date fair value of stock option awards granted during the six months ended June 30, 2022 was $10.35. The total fair value of options vested during the three months ended June 30, 2022 and 2021 was $0.3 million and $0.1 million, respectively. The total fair value of options vested during the six months June 30, 2022 and 2021 was $0.5 million and $0.3 million, respectively. No options were exercised during any of the periods presented. At June 30, 2022, there was $1.1 million of unrecognized compensation expense that will be recognized over a weighted-average period of 1.93 years.

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, 2022 and 2021 were as follows:

	2022			2021
Expected term (in years)		5.74			10
Risk-free interest rate		1.9	%		1.5	%
Expected volatility		135.0	%		124.5	%
Dividend yield		—	%		—	%

Restricted Stock Unit Awards

The Company issues restricted stock units ("RSU") to newly elected, non-executive members of the board of directors that vest in six, tri-monthly installments beginning 18 months after the respective grant date. The fair value of a RSU is equal to the fair market value price of the Company’s common stock on the date of grant. RSU expense is recorded on a straight-line basis over the service period.

The following table summarizes activity related to RSU awards during the period indicated:

	Number of Units			Weighted average grant date fair value
Balance at January 1, 2022		5,509		$	34.78
Vested (1)		(837	)		29.87
Outstanding at June 30, 2022		4,672		$	35.66

(1)  The RSUs vested during the six months ended  June 30, 2022 were settled on a hybrid basis. The Company withheld 308 shares of common stock and, in lieu of delivering such shares, paid the RSU holder an amount in cash equal to the fair market value of such shares on vesting date, representing the holder's approximate tax liability associated with such vesting amount in cash equal to the fair market value of such shares on vesting date, representing the holder's approximate tax liability associated with such vesting.

The Company recognized approximately $16,000 and $5,000 in expense related to these awards during the three months ended June 30, 2022 and 2021, respectively. The Company recognized approximately $32,000 and $10,000 in expense related to these awards during the six months ended June 30, 2022 and 2021, respectively. At June 30, 2022, there was approximately $96,000 of unrecognized compensation cost that will be recognized over a weighted average period of 1.69 years.