Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | NOTE 11. STOCK-BASED COMPENSATION
On September 23, 2021, the 2021 Equity Incentive Plan (“2021 Plan”) and the 2021 Employee Stock Purchase Plan (“ESPP”) became effective upon the prior approval of Old Jasper’s board of directors and stockholders. The 2021 Plan and ESPP provide for annual automatic increases in the number of shares reserved under each plan, beginning on January 1, 2022. The number of shares available for issuance under the 2021 Plan will increase annually in an amount equal to the least of (i) 2,750,000 shares, (ii) a number of shares equal to 4% of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, or (iii) such lesser number of shares determined by the Company’s Board of Directors (“Board”) no later than the last day of the immediately preceding fiscal year. The number of shares of common stock available for issuance under the ESPP will increase annually in an amount equal to the least of (i) 550,000 shares of common stock, (ii) a number of shares of common stock equal to 1% of the total number of shares of all classes of common stock of the Company on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Board. As of September 30, 2022, 5,906,146 shares were reserved for issuance under the 2021 Plan, of which 3,889,106 shares were available for future grant and 2,017,040 shares were subject to outstanding options and restricted stock units (“RSUs”), including performance-based awards. As of September 30, 2022, no shares have been issued under the ESPP and 928,551 shares were reserved and available for future issuance.
On March 14, 2022, the compensation committee of the board adopted the 2022 Inducement Equity Incentive Plan (the “2022 Inducement Plan”) under which the Company may grant equity awards to new employees. The only persons eligible to receive grants under the 2022 Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq guidance. As of September 30, 2022, 3,000,000 shares were reserved for issuance under the 2022 Inducement Plan, of which 1,295,672 shares were available for future grant and 1,704,328 shares were subject to an outstanding stock option.
Under the 2021 Plan, the Company can grant incentive stock options, nonstatutory stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance awards and other awards to employees, directors and consultants. Under the 2022 Inducement Plan, the Company can grant nonstatutory stock options, restricted stock awards, stock appreciation rights, RSUs, performance awards and other awards, but only to an individual, as a material inducement to such individual to enter into employment with the Company or an affiliate of the Company, who (i) has not previously been an employee or director of the Company or (ii) is rehired following a bona fide period of non-employment with the Company. Under the ESPP, the Company can grant purchase rights to employees to purchase shares of common stock at a purchase price which equal to 85% of the fair market value of common stock on the offering date or on the exercise date, whichever is lower.
Stock options under the 2021 Plan and the 2022 Inducement Plan may be granted for periods of up to 10 years and at prices no less than 100% of the fair market value of the shares on the date of grant, provided, however, that the exercise price of an ISO (which cannot be granted pursuant to the 2022 Inducement Plan) granted to a 10% stockholder may not be less than 110% of the fair market value of the shares. Stock options granted to employees and non-employees generally vest ratably over four years.
Stock Options
The following table summarizes the activity under the 2021 Plan, the 2022 Inducement Plan and the Company’s 2019 Equity Incentive Plan for the nine months ended September 30, 2022:
The aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The total intrinsic value of the options exercised during the nine months ended September 30, 2022 was $0.1 million.
The total fair value of options that vested during the nine months ended September 30, 2022 was $1.0 million. The weighted-average grant date fair value of options granted during the nine months ended September 30, 2022 was $1.88 per share.
Future stock-based compensation for unvested options as of September 30, 2022 was $6.1 million, which is expected to be recognized over a weighted-average period of 2.9 years, including $0.1 million related to performance-based stock options, which is expected to be recognized over a weighted-average period of 0.5 years.
During the nine months ended September 30, 2022, the Company granted 157,500 shares subject to performance-based stock options with the weighted-average exercise price of $2.71 which are included in the table above. As of September 30, 2022, 463,959 shares subject to the performance-based stock options with the weighted-average exercise price of $1.71 per share and weighted-average contractual life of 8.3 years were outstanding.
Restricted Stock Units (RSUs)
The following table provides a summary of RSUs activity under the 2021 Plan during the nine months ended September 30, 2022:
Unamortized stock-based compensation for restricted stock units as of September 30, 2022 was less than $0.1 million, which is expected to be recognized over a weighted-average period of 0.4 years.
Employee Stock Purchase Plan
The first offering period commenced in June 2022 and will end in December 2022. The Company did not issue any shares of common stock under the ESPP as of September 30, 2022. The Company recorded $0.1 million in accrued liabilities related to contributions withheld as of September 30, 2022.
Unamortized stock-based compensation for shares issuable under the ESPP as of September 30, 2022 was less than $0.1 million, which is expected to be recognized over a weighted-average period of 0.1 years.
Stock-Based Compensation Expense
The following table presents stock-based compensation expenses related to options and RSUs granted to employees and non-employees, ESPP awards and restricted common stock shares issued to founders (in thousands):
The Company recognized $0.1 million of stock-based compensation expense related to performance-based options and RSUs during each of the three and nine months ended September 30, 2022, respectively. The Company recognized less than $0.1 million and $0.1 million of stock-based compensation expense related to performance-based options during the three and nine months ended September 30, 2021, respectively. On March 15, 2022, William Lis, who had been serving as the Company’s Chief Executive Officer and Executive Chairman, transitioned to the position of non-employee Chairperson of the Board. During the three and nine months ended September 30, 2022, in connection with Mr. Lis’ transition, the Company recognized zero and $0.4 million, respectively, of general and administrative expense on certain stock options and RSUs granted to Mr. Lis for his Chief Executive Officer and Executive Chairman services to the Company.
Valuation of Stock Options
The grant date fair value of stock options was estimated using a Black-Scholes option-pricing model with the following assumptions:
No stock options were granted during the three months ended September 30, 2021.
Valuation of ESPP Awards
The grant date fair value of ESPP awards was estimated using a Black-Scholes option-pricing model with the following assumptions:
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