Share-Based Payments

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Share-Based Payments

Note 14 Share-Based Payments

The Board of Directors has been authorized by the General Meeting of the Shareholders to grant restricted stock units (“RSU”), stock options plan (“SO”), employee warrants (Bons de Souscription de Parts de Créateur d’Entreprise or “BSPCE”) and (Bons de Souscription d’Actions or “BSA”), as follows:

Share-Based Payments instrument	General Meeting of Shareholders	Board of directors meeting	Grant date	Number granted
BCE	12/16/10	6/24/11	6/24/11	24 000
BCE	12/16/10	11/22/11	11/22/11	10 039
BSA	12/16/10	6/24/11	6/24/11	8 000
BSA	12/9/11	9/25/12	9/25/12	30 000
BSA	6/4/13	7/25/13	7/25/13	73 000
SO	12/9/11	9/18/13	9/18/13	518 000
SO	6/3/14	6/3/14	6/3/14	75 000
BSA	6/3/14	3/24/15	3/24/15	10 000
SO	6/3/14	6/23/15	6/23/15	120 000
BSA	6/23/15	11/19/15	11/19/15	22 500
SO	6/3/14	9/30/15	11/19/15	195 000
BSA	6/23/15	12/15/15	2/15/16	90 000
SO	6/3/14	12/15/15	1/4/16	75 000
SO	6/3/14	4/6/16	4/21/16	33 000
SO	6/3/14	6/21/16	6/21/16	110 000
SO	6/3/14	6/21/16	8/1/16	10 000
BSA	6/21/16	6/21/16	8/21/16	20 000
SO	6/3/14	6/21/16	9/15/16	9 300
SO	6/3/14	6/21/16	10/17/16	16 500
SO	6/3/14	6/21/16	11/15/16	8 300
BSA	6/21/16	12/9/16	2/9/17	59 000
SO	6/3/14	6/21/16	12/9/16	74 960
SO	6/3/14	6/21/16	12/15/16	1 100
SO	6/3/14	6/21/16	1/16/17	19 100
AGA	9/21/15	3/14/17	3/14/17	22 500
SO	6/3/14	6/21/16	3/15/17	7 200
SO	6/3/14	6/21/16	4/18/17	16 500
AGA	9/21/15	4/20/17	4/20/17	24 000
BSA	6/15/17	6/15/17	8/15/17	9 000
SO	6/3/14	6/15/17	6/15/17	126 000
SO	6/15/17	6/15/17	6/15/17	111 600
SO	6/15/17	6/15/17	7/17/17	30 900
SO	6/15/17	6/15/17	9/15/17	52 600
SO	6/15/17	11/17/17	12/5/17	625 200
SO	6/15/17	6/15/17	12/15/17	8 300
SO	6/15/17	6/15/17	1/15/18	15 500
SO	6/15/17	6/15/17	4/16/18	16 500
BSA	6/15/17	5/2/18	7/2/18	44 000
SO	6/15/17	6/15/17	5/15/18	16 500
SO	6/15/17	6/15/17	6/15/18	23 600
AGA	6/22/18	6/22/18	6/22/18	486 153
SO	6/22/18	6/22/18	6/22/18	50 000
SO	6/22/18	6/22/18	7/16/18	28 800
SO	6/22/18	6/22/18	8/15/18	33 500
AGA	6/22/18	9/6/18	9/6/18	450
SO	6/22/18	9/6/18	9/6/18	65 000
SO	6/22/18	6/22/18	9/17/18	80 900
SO	6/22/18	6/22/18	10/15/18	76 700
AGA	6/22/18	11/1/18	11/1/18	57 000
SO	6/22/18	6/22/18	11/15/18	26 000
SO	6/22/18	11/29/18	11/29/18	350 000
AGA	6/22/18	12/12/18	12/12/18	16 250
AGA	6/22/18	12/12/18	12/17/18	3 000
SO	6/22/18	12/12/18	12/12/18	34 000
SO	6/22/18	11/28/18	12/17/18	7 200
SO	6/22/18	11/28/18	1/15/19	9 500
SO	6/22/18	3/4/19	3/20/19	547 100
AGA	6/22/18	5/10/19	5/10/19	100 000
SO	6/22/18	11/28/18	5/15/19	7 200
SO	5/24/19	5/24/19	5/24/19	150 000
SO	5/24/19	5/24/19	6/17/19	7 200
SO	5/24/19	7/1/19	7/1/19	403 400
SO	5/24/19	7/1/19	7/22/19	75 000
AGA	5/24/19	7/31/19	7/31/19	23 750
SO	5/24/19	5/24/19	9/16/19	34 000
AGA	5/24/19	10/11/19	10/11/19	40 000
SO	5/24/19	10/11/19	10/16/19	3 500
SO	5/24/19	10/11/19	12/16/19	53 100
AGA	5/24/19	12/19/19	12/19/19	23 600
SO	5/24/19	10/11/19	1/15/20	94 500
AGA	5/24/19	10/11/19	3/16/20	5 000
AGA	4/20/20	4/20/20	4/29/20	20 000
AGA	4/20/20	11/24/20	11/24/20	475 000
SO	4/20/20	11/24/20	11/24/20	1 216 200

In the following tables in Notes 14.1 to 14.4, exercise prices, grant date share fair values and fair value per equity instruments are provided in euros, as the Company is incorporated in France and the euro is the currency used for the grants.

14.1 Non- employee warrants

The Company’s board of directors has been authorized by the shareholders’ general meeting to grant BSA warrants (“Bons de Souscription d’Actions or “BSA”) to non-employee’s members of the Board of Directors and members of the Scientific Advisory Board. The Company no longer grants BSA warrants since 2018.

The different employee warrants plans granted by the Board of Directors are similar in their nature and conditions, except for the exercise price that is comprised between €5.13€ and €69.75.

The following table summarizes all BSA warrants activity during the year ended December 31, 2019:

	Number of warrants outstanding		Weighted- average exercise price in Euros		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value in thousands of Euros
Balance as of December 31, 2018		218,008		52.78		7.36		68.7
Granted during the period		—		—		—		—
Forfeited during the period		—		—		—		—
Exercised during the period		—		—		—		—
Expired during the period		—		—		—		—
Balance as of December 31, 2019		218,008		52.78		6.36		244.6
Warrants exercisable as of December 31, 2019		218,008		52.78		6.36		244.6

The following table summarizes all BSA warrants activity during the year ended December 31, 2020:

	Number of warrants outstanding		Weighted- average exercise price in Euros		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value in thousands of Euros
Balance as of December 31, 2019		218,008		52.78		6.36		244.6
Granted during the period		—		—		—		—
Forfeited during the period		—		—		—		—
Exercised during the period		—		—		—		—
Expired during the period		—		—		—		—
Balance as of December 31, 2020		218,008		52.78		5.36		—
Warrants exercisable as of December 31, 2020		218,008		52.78		5.36		—

There were no BSA warrants granted during the years ended December 31, 2019 and 2020.

14.2 Employee warrants

The Company’s Board of Directors has been authorized by the shareholders’ general meeting to grant BCE warrants (Bons de Souscription de Parts de Créateur d’Entreprise or “BCE”) to employees. The Company no longer grants BCE warrants since 2011.

Following the decision of the General Meeting of December 9, 2011, each BCE gives the right to subscribe to 15 shares instead of 1 share. The exercise price of each BCE has been adjusted accordingly and is therefore equal to 1/15th of the price initially set by the General Meeting.

The following table summarizes all BCE warrants activity during the year ended December 31, 2019:

	Number of warrants outstanding		Weighted- average exercise price in Euros		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value in thousands of Euros
Balance as of December 31, 2018		7,166		5.13		2.47		588.7
Granted during the period		—		—		—		—
Forfeited during the period		—		—		—		—
Exercised during the period		—		—		—		—
Expired during the period		—		—		—		—
Balance as of December 31, 2019		7,166		5.13		1.47		1,558.2
Warrants exercisable as of December 31, 2019		7,166		5.13		1.47		1,558.2

The following table summarizes all BCE warrants activity during the year ended December 31, 2020:

	Number of warrants outstanding			Weighted- average exercise price in Euros		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value in thousands of Euros
Balance as of December 31, 2019		7,166			5.13		1.47		1,558.2
Granted during the period		—			—		—		—
Forfeited during the period		—			—		—		—
Exercised during the period		(1,666	)		5.13		—		—
Expired during the period		—			—		—		—
Balance as of December 31, 2020		5,500			5.13		0.47		—
Warrants exercisable as of December 31, 2020		5,500			5.13		0.47		—

There were no BCE warrants grants during the years ended December 31, 2020 and 2019.

14.3 Stock options

The Company’s Board of Directors has been authorized by the shareholders’ general meeting to grant stock option plans (“SO”) to employees.

The different stock options plans granted by the Board of Directors are similar in their nature and conditions, except for the exercise price that is comprised between €4,16 and €74,22.

All SO issued have a ten-year contractual life. SO are expensed in accordance with the following vesting conditions:

• Before June 22, 2018 and after January 15, 2020, SO granted mainly vest over four years at a rate of 25% upon the first anniversary of the issuance date and 12,5% every 6 months thereafter, subject to the beneficiary being still employed by the Company (except in specific contractual clause or board of directors’ decisions),

• Between June 22, 2018 and January 15, 2020, SO may be exercised by the beneficiary once both of the following conditions have been met:

• Service condition: 25% upon the first anniversary of the issuance date and 12,5% every 6 months thereafter, subject to the beneficiary being still employed by the Company (except in specific contractual clause or board of directors’ decisions), and,

• Performance condition: approval of Viaskin™ Peanut by the US Food and Drug Administration,

Performance conditions which are other than market conditions, are taken into account by adjusting the number of equity instruments included in the measurement of the transaction amount but are not taken into account when estimating the fair value of the shares. Estimated achievement of performance conditions is reviewed at each reporting date.

The Company also applied a forfeiture rate for each grant according to its respective characteristics and composition. This forfeiture rate is reviewed at each reporting date.

The following table summarizes all stock options activity during the year ended December 31, 2019:

	Number of SO outstanding			Weighted-average exercise price in Euros		Weighted-average remaining contractual term (in years)		Aggregate intrinsic value in thousands of Euros
Balance as of December 31, 2018		2,461,570			42.10		8.32		617.1
Granted during the period		1,282,800			15.49		—		—
Forfeited during the period		(742,325	)		45.49		—		—
Exercised during the period		—			—		—		—
Expired during the period		—			—		—		—
Balance as of December 31, 2019		3,002,045			29.89		8.21		7,286.3
Options exercisable as of December 31, 2019		810,699			40.96		6.16		2,448.2

The following table summarizes all stock options activity during the year ended December 31, 2020:

	Number of SO outstanding			Weighted-average exercise price in Euros		Weighted-average remaining contractual term (in years)		Aggregate intrinsic value in thousands of Euros
Balance as of December 31, 2019		3,002,045			29.89		8.21		7,286.3
Granted during the period		1,310,700			5.54		—		—
Forfeited during the period		(1,667,235	)		28.49		—		—
Exercised during the period		(35,000	)		7.57		—		—
Expired during the period		—			—		—		—
Balance as of December 31, 2020		2,610,510			18.75		8.17		198.8
Options exercisable as of December 31, 2020		580,023			38.79		4.94		—

Stock options have been granted during the years ended December 31, 2020 and 2019. The weighted-average exercise price of SO granted during the year ended December 31, 2020 was €5.54 per share.

As of December 31, 2020, there was €7.3 million ($9.0 million converted at closing rate) of unrecognized SO expense that is expected to be recognized over a weighted-average period of 1.8 years.

Fair value of stock options

Determining the fair value of the share-based payments at the grant date requires judgment. The Company calculated the fair value of stock options instrument on the grant date using the Black-Scholes option pricing model. The Black-Scholes model requires the input of highly subjective assumptions, including the expected volatility, expected term, risk-free interest rate and dividend yield.

Exercise price

The exercise price of the Company’s stock awards is based on the fair market value of our ordinary shares.

Risk-free interest rate

The risk-free interest rate is based on French government bonds (GFRN) with a maturity corresponding to the stock options maturity.

Expected term

The Company determines the expected term based on the average period the stock options are expected to remain outstanding.

Expected Volatility

The Company determines the expected volatility based on the historical data period corresponding to the stock options expected maturity.

Expected Dividend yield

The Company has never declared or paid any cash dividends, and it does not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero.

The Company estimated the following assumptions for the calculation of the fair value of the stock options:

	Assumptions per year ended, December 31,
Stock options per grant date	Prior to 2017		2017		2018		2019		2020
Weighted average shares price at grant date in €		36.69		45.49		31.86		15.26		5.54
Weighted average expected volatility		45.4%		41.8%		47.1%		70.8%		87.3%
Weighted average risk-free interest rate		1.0%		(0.1)%		0.3%		(0.1)%		(0.5)%
Weighted average expected term (in years)		6.7		6.0		6.0		6.0		6.0
Dividend yield		0		0		0		0		0
Weighted average fair value of stock-options in €		17,66		17,16		13,67		9,65		3,90

14.4 Restricted stock units

The Company’s board of directors has been authorized by the shareholders’ general meeting to grant Restricted stock units plans (“RSU”) to employees.

RSUs are measured based on the fair market value of the underlying stock on the date of grant and recognized as expense on a straight-line basis in accordance with the following vesting conditions:

• Before May 31, 2019, the vesting of RSUs granted is subject to the expiration of the presence condition of one (1) or two (2) years (except in specific board of directors’ decisions). The release of RSUs for these plans is subject to the achievement of performance conditions (submission of a BLA to U.S. FDA for Viaskin™ Peanut, approval of Viaskin™ Peanut by the U.S. FDA, first sale of Viaskin™ Peanut in the United States);

• Between May 31, 2019 and November 23, 2020, the vesting of RSUs is subject either to the expiration of the presence condition of two (2) years only, or to the dual condition of expiration of the presence condition and achievement of the performance condition (date of approval of Viaskin™ Peanut by the U.S. FDA);

• Since November 24, 2020, RSUs vest over four years at a rate of 25% upon the first anniversary of the issuance date and 12,5% every 6 months thereafter, subject to the beneficiary being still employed by the Company (except in specific board of directors’ decisions).

Performance conditions, are other than market conditions, which are taken into account by adjusting the number of equity instruments included in the measurement of the transaction amount but are not taken into account when estimating the fair value of the shares. Estimated achievement of performance conditions is reviewed at each reporting date.

RSU plans may be subject to a conservation period under French governing laws.

The Company applied a forfeiture rate for each grant according to its respective characteristics and composition. This forfeiture rate is reviewed at each reporting date.

The following table summarizes all RSUs activity for the year ended December 31, 2019:

	Number of RSU outstanding			Weighted average grant date fair value in Euros
Balance as of December 31, 2018		572,228			36.16
Granted during the period		187,350			15.65
Forfeited during the period		(49,433	)		27.03
Released during the period		(18,000	)		63.49
Expired during the period		—			—
Balance as of December 31, 2019		692,145			30.55

The service conditions have been met in 2019 for the plans granted on March 14, 2017, April 20, 2017, June 9 and 22, 2018, November 1, 2018 and December 12, 2018 with a total fair value of €19,680 thousands.

The following table summarizes all RSUs activity for the year ended December 31, 2020:

	Number of RSU outstanding			Weighted average grant date fair value in Euros
Balance as of December 31, 2019		692,145			30.55
Granted during the period		500,000			4.56
Forfeited during the period		(71,400	)		7.29
Released during the period		(2,000	)		68.07
Expired during the period		—			—
Balance as of December 31, 2020		1,118,745			20.35

The service conditions have been met in 2020 for the plan granted on May 10, 2019 with a total fair value of €1,288 thousands.

As of December 31, 2020, there was €2.5 million ($3.0 million converted at closing rate) of unrecognized RSUs compensation expense that is expected to be recognized over a weighted-average period of 2.2 years.

14.5 Reconciliation of the share-based payments expenses with the consolidated statements of operations

	December 31,
			2020		2019
Research & development		Stock-options		190		(3,158)
		RSU		(806)		(5,431)
Sales & marketing		Stock-options		2,141		381
		RSU		(24)		(651)
General & administrative		Stock-options		(119)		(3,604)
		RSU		(253)		(4,777)
Total share-based compensation (expense)				1,130		(17,239)

As of December 31, 2020, reversal of share-based payments expenses is mainly due to the restructuring plan announced on June 26, 2020 which led to significant reduction in the Company’s workforce.