Stock-Based Compensation Plan

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation Plan

Stock-Based Compensation Plan

8.            Stock-Based Compensation Plan

The 2017 Plan – On December 21, 2017, the Company’s stockholders approved the Bio-Path Holdings, Inc. 2017 Stock Incentive Plan (as amended, the “2017 Plan”), which replaced the First Amended 2007 Stock Incentive Plan, as amended (the “2007 Plan”). The 2007 Plan expired by its terms in January 2018, and no awards were made under the 2007 Plan from the approval of the 2017 Plan on December 21, 2017 until the expiration of the 2007 Plan. The 2017 Plan provides for the grant of Incentive Stock Options, Non-Qualified Stock Options, Restricted Shares, Restricted Share Units, Stock Appreciation Rights, Performance-Based Awards and other stock-based awards, or any combination of the foregoing to the Company’s employees, non-employee directors and consultants. On December 19, 2019, the Company’s stockholders approved an amendment to the 2017 Plan to increase the number of shares reserved for grant and issuance pursuant to the 2017 Plan by 600,000 shares to 660,000 shares. Under the 2017 Plan, the exercise price of awards is determined by the Board of Directors or the compensation committee of the Board of Directors, and for options intended to qualify as qualified Incentive Stock Options, may not be less than the fair market value as determined by the closing stock price at the date of the grant. Each option and award under the 2017 Plan shall vest and expire as determined by the Board of Directors or the compensation committee. Options expire no later than ten years from the date of grant. All grants provide for accelerated vesting if there is a change of control, as defined in the 2017 Plan.

Stock-based compensation expense for the three months ended March 31, 2022 and 2021 was $0.2 million and $0.1 million, respectively. Of these amounts, stock-based compensation expense for personnel involved in the Company’s general and administrative activities for the three months ended March 31, 2022 and 2021 was $0.2 million and $0.1 million, respectively. Stock-based compensation expense for personnel involved in the Company’s research and development activities for the three months ended March 31, 2022 and 2021 was $47,000 and $29,000, respectively.

The Company utilized the Black-Scholes valuation model for estimating the fair value of the stock options granted, with the following weighted-average assumptions for options granted in the three months ended March 31, 2022 and 2021, respectively:

	2022		2021
Risk-free interest rate	2.43	%	1.18	%
Expected volatility	127	%	127	%
Expected term in years	6.0		6.1
Dividend yield	—	%	—	%

The following summary represents option activity under the Company’s stock-based compensation plans for the three months ended March 31, 2022:

		Weighted-
		Average
		Exercise
	Options	Price
	(in thousands)
Outstanding at December 31, 2021	486	$	14.58
Granted	192		3.71
Forfeited	(2)		7.02
Outstanding at March 31, 2022	676	$	11.52
Vested and expected to vest March 31, 2022	633	$	11.92
Exercisable at March 31, 2022	243	$	22.52

As of March 31, 2022, the aggregate intrinsic value of outstanding stock options was $34,000. The aggregate intrinsic value represents the total pretax intrinsic value (the difference between the Company’s closing stock price on March 31, 2022 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2022. This amount changes based on the fair value of the Company’s stock.

As of March 31, 2022, unamortized stock-based compensation expense for all outstanding options was $1.8 million, which is expected to be recognized over a weighted average vesting period of 2.8 years.