Stock-Based Compensation |
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Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
NOTE 7 – STOCK-BASED COMPENSATION On August 29, 2014, the Company’s Board of Directors adopted and approved the 2014 Equity Incentive Plan (the “2014 Plan”), which authorized the Company to grant shares of common stock in the form of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock and restricted stock units. The Company's Board of Directors adopted and the Company's stockholders approved the 2017 equity incentive plan (“2017 Plan”), which became effective immediately on May 4, 2017. The initial reserve of shares of common stock under the 2017 Plan was 3,052,059 shares. The 2017 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance-based stock awards, and other forms of stock-based awards. Additionally, the 2017 Plan provides for the grant of performance cash awards. The Company's employees, officers, directors and consultants and advisors are eligible to receive awards under the 2017 Plan. Upon the adoption of the 2017 Plan, no further awards will be granted under the 2014 Plan. Pursuant to the terms of the 2017 Plan, on each January 1st, the plan limit shall be increased by the lesser of (x) 5% of the number of shares of common stock outstanding as of the immediately preceding December 31 and (y) such lesser number as the Board of Directors may determine in its discretion. On January 1, 2019, an additional 1,232,705 shares were reserved for issuance under the 2017 Plan. As of September 30, 2019, there were 3,726,302 shares of the Company’s common stock reserved and available for issuance under the 2017 Plan. The Company's Board of Directors adopted, and the Company's stockholders approved the 2017 employee stock purchase plan (the “2017 ESPP”), which became effective immediately prior to the execution of the underwriting agreement related to the Company’s initial public offering on May 4, 2017. The initial reserve of shares of common stock that may be issued under the 2017 ESPP was 279,069 shares. On September 20, 2017, the Company’s Compensation Committee approved an offering period under the 2017 ESPP, which began on October 20, 2017. The ESPP allows employees to purchase common stock of the Company at a 15% discount to the market price on designated purchase dates. During the three months ended September 30, 2019 and 2018, 35,416 and 22,142 shares were purchased under the ESPP and the Company recorded expense of $35,000 and $30,000, respectively. During the nine months ended September 30, 2019 and 2018, 80,542 and 32,114 shares were purchased under the ESPP and the Company recorded expense of $100,000 and $77,000, respectively. The number of shares of common stock reserved for issuance under the 2017 ESPP will automatically increase on January 1 of each year, beginning on January 1, 2018 and continuing through and including January 1, 2027, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (ii) 550,000 shares or (iii) such lesser number of shares determined by our Board. On January 1, 2019, an additional 246,541 shares were reserved for issuance under the 2017 ESPP. As of September 30, 2019, there were 659,016 shares of the Company’s common stock reserved for issuance under the 2017 ESPP. Unless specified otherwise in an individual option agreement, stock options granted under the 2014 Plan and 2017 Plan generally have a ten-year term and a four-year graded vesting period. The vesting requirement is generally conditioned upon the grantee’s continued service with the Company during the vesting period. Once vested, all awards are exercisable from the date of grant until they expire. The option grants are non-transferable. Vested options generally remain exercisable for 90 days subsequent to the termination of the option holder’s service with the Company. In the event of option holder’s death or disability while employed by or providing service to the Company, the exercisable period extends to 12 months. Performance-based option awards generally have similar terms, with vesting commencing on the date the performance condition is achieved and expire in accordance with the specific terms of the agreement. At September 30, 2019, there were 665,375 performance-based options outstanding and unvested that include options to be granted upon the achievement of certain research and development milestones. The fair value of options granted during the nine months ended September 30, 2019 and 2018 was estimated using the Black-Scholes option valuation model. The inputs for the Black-Scholes option valuation model require management’s significant assumptions and are detailed in the table below. The risk-free interest rates were based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal to the expected life at the grant date. The expected life was based on the simplified method in accordance with the SEC Staff Accounting Bulletin No. Topic 14D. The expected volatility was estimated based on historical volatility information of peer companies that are publicly available. All assumptions used to calculate the grant date fair value of nonemployee options are generally consistent with the assumptions used for options granted to employees. In the event the Company terminates any of its consulting agreements, the unvested options underlying the agreements would also be cancelled. Unvested nonemployee options are marked-to-market at each reporting period until vested. The Company granted 175,000 and zero stock options to nonemployee consultants for services rendered during the nine months ended September 30, 2019 and 2018, respectively. There were 152,073, and 12,356 unvested nonemployee options outstanding as of September 30, 2019, and 2018, respectively. Total expense recognized related to the nonemployee stock options for the three months ended September 30, 2019 and 2018 was $35,000 and $40,730, respectively. Total expense recognized related to the nonemployee stock options for the nine months ended September 30, 2019 and 2018 was $17,000 and $133,000, respectively. Total unrecognized compensation expenses related to the nonemployee stock options was $339,475 as of September 30, 2019. During the nine months ended September 30, 2019 and 2018, the Company recognized no expense for nonemployee performance-based option awards. The Company granted 1,781,115 and 1,352,578 stock options to employees during the nine months ended September 30, 2019 and 2018 respectively. There were 2,615,208 and 2,493,308 unvested employee options outstanding as of September 30, 2019, and 2018, respectively. Total expense recognized related to the employee stock options for the three months ended September 30, 2019 and 2018 was $1.1 million and $1.6 million, respectively. Total expense recognized related to the employee stock options for the nine months ended September 30, 2019 and 2018 was $4.0 million and $5.1 million, respectively. Total unrecognized compensation expense related to employee stock options was $6.3 million as of September 30, 2019. During the nine months ended September 30, 2019 and 2018, the Company recognized $9,000 and zero, respectively in expenses for employee performance-based option awards. The Company’s stock-based compensation expense was recognized in operating expense as follows:
The fair value of employee options granted during the three and nine months ended September 30, 2019 and 2018 was estimated by utilizing the following assumptions:
The fair value of nonemployee options granted and remeasured during the three and the nine months ended September 30, 2019 and 2018 was estimated by utilizing the following assumptions:
The following table summarizes the number of options outstanding and the weighted average exercise price:
At September 30, 2019 there was approximately $6.6 million of unamortized share–based compensation expense, which is expected to be recognized over a remaining average vesting period of 2.01 years. |