Stock-Based Compensation Plan

9 Months Ended

Sep. 30, 2023

Stock-Based Compensation Plan [Abstract]

Stock-Based Compensation Plan

10.            Stock-Based Compensation Plan

The 2022 Plan – On December 15, 2022, the Company’s stockholders approved the Bio-Path Holdings, Inc. 2022 Stock Incentive Plan (the “2022 Plan”), which replaced the 2017 Stock Incentive Plan, as amended (the “2017 Plan,” and together with the 2022 Plan, the “Plans”). As of stockholder approval of the 2022 Plan on December 15, 2022, no further awards will be made under the 2017 Plan. The 2022 Plan provides for the grant of Incentive Stock Options, Non-Qualified Stock Options, Restricted Shares, Restricted Share Units, Stock Appreciation Rights and other stock-based awards, or any combination of the foregoing, to the Company’s employees, non-employee directors and consultants. As of December 31, 2022, there were 1,300,000 shares of common stock reserved for future issuance of awards under the 2022 Plan. Under the 2022 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, 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 2022 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 in control, as defined in the 2022 Plan.

Stock-based compensation expense for each of the three months ended September 30, 2023 and 2022 was $0.2 million. Of these amounts, stock-based compensation expense for personnel involved in the Company’s general and administrative activities for the three months ended September 30, 2023 and 2022 was $0.1 million and $0.2 million, respectively. Stock-based compensation expense for personnel involved in the Company’s research and development activities for the three months ended September 30, 2023 and 2022 was $45,000 and $49,000, respectively.

Stock-based compensation expense for each of the nine months ended September 30, 2023 and 2022 was $0.6 million. Of these amounts, stock-based compensation expense for personnel involved in the Company’s general and administrative activities for the nine months ended September 30, 2023 and 2022 was $0.4 million and $0.5 million, respectively. Stock-based compensation expense for personnel involved in the Company’s research and development activities for each of the nine months ended September 30, 2023 and 2022 was $0.1 million.

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 nine months ended September 30, 2023 and 2022, respectively:

	2023		2022
Risk-free interest rate	3.42	%	2.43	%
Expected volatility	129	%	127	%
Expected term in years	6.0		6.0
Dividend yield	—	%	—	%

The following summary represents option activity under the Company’s stock-based compensation plans for the nine months ended September 30, 2023:

		Weighted-
		Average
		Exercise
	Options	Price
	(in thousands)
Outstanding at December 31, 2022	658	$	11.67
Granted	221	$	1.39
Expired	(11)	$	92.00
Outstanding at September 30, 2023	868	$	8.06
Vested and expected to vest September 30, 2023	849	$	8.15
Exercisable at September 30, 2023	458	$	12.44

As of September 30, 2023, outstanding stock options did not have any aggregate intrinsic value. The aggregate intrinsic value represents the total pretax intrinsic value (the difference between the Company’s closing stock price on September 30, 2023 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 September 30, 2023. This amount changes based on the fair value of the Company’s stock.

As of September 30, 2023, unamortized stock-based compensation expense for all outstanding options was $1.0 million, which is expected to be recognized over a weighted average vesting period of 1.9 years.