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Stock Options, Restricted Stock and Stock-Based Compensation
6 Months Ended
Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock Options, Restricted Stock and Stock-Based Compensation

11. Stock Options, Restricted Stock and Stock-Based Compensation

Equity Incentive Plans

The Company’s 2015 Stock Plan, as amended, (the 2015 Plan) provides for the Company to sell or issue common shares or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the board of directors and consultants of the Company. The 2015 Plan is administered by the board of directors and exercise prices, vesting and other restrictions are determined at its discretion. All stock option grants are non-statutory stock options except option grants to employees intended to qualify as incentive stock options under the Internal Revenue Code of 1986, as amended. Incentive stock options may not be granted at less than the fair market value of the Company’s common stock on the date of grant, as determined in good faith by the board of directors at its sole discretion. Nonqualified stock options may be granted at an exercise price established by the board of directors at its sole discretion and the vesting periods may vary. Vesting periods are generally four years and are determined by the board of directors. Stock options become exercisable as they vest. Options granted under the 2015 Plan expire no more than ten years from the date of grant. As of June 30, 2023, there are no shares available for grants under the 2015 Plan and the 2015 Plan continues to govern the terms and conditions of the outstanding awards under the 2015 Plan.

On July 14, 2021, the Company’s 2021 Equity Incentive Plan (the 2021 Plan) was approved by the Company’s stockholders, and became effective upon completion of the IPO and serves as the successor to the 2015 Plan. 4,831,345 shares of common stock are reserved under the 2021 Plan, of which 1,600,756 shares remain available for future grants as of June 30, 2023.

Stock Options

Stock option activity is summarized as follows:

 

 

NUMBER OF
STOCK
OPTIONS

 

 

WEIGHTED-
AVERAGE
EXERCISE
PRICE

 

 

WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
TERM (IN YEARS)

 

 

AGGREGATE
INTRINSIC
VALUE

 

Outstanding as of December 31, 2022

 

 

5,645,420

 

 

$

2.77

 

 

 

 

 

 

 

Granted

 

 

1,248,603

 

 

 

1.31

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled, forfeited or expired

 

 

(470,488

)

 

 

3.43

 

 

 

 

 

 

 

Outstanding as of June 30, 2023

 

 

6,423,535

 

 

$

2.44

 

 

 

7.57

 

 

 

10,000

 

Exercisable as of June 30, 2023

 

 

3,252,501

 

 

$

2.39

 

 

 

6.34

 

 

 

5,000

 

Unvested as of June 30, 2023

 

 

3,171,034

 

 

$

2.49

 

 

 

8.83

 

 

 

5,000

 

 

The 2015 Plan, permits participants to use common stock they previously acquired to pay for the exercise of stock options based upon the fair value on the date of exercise. In connection with the exercise of a stock options to purchase 306,518 shares of our common stock at an exercise price of $1.46, option holders tendered 122,608 shares of our common stock previously acquired in consideration of the full aggregate exercise price in accordance with the terms of the option and the 2015 Plan. The shares tendered are recorded as treasury stock within the Company's condensed and consolidated financial statements at June 30, 2023.

The fair value of stock options granted was estimated on the grant date using the Black-Scholes option pricing model based on the following weighted-average assumptions:

 

 

SIX MONTHS ENDED
JUNE 30,

 

 

 

2023

 

 

2022

 

Expected option life (years)

 

5.48 - 6.08

 

 

6.02 - 6.08

 

Risk-free interest rate

 

3.50% - 4.13%

 

 

1.69% - 3.03%

 

Expected volatility

 

91.33% - 94.51%

 

 

85.09% - 86.09%

 

Expected dividend yield

 

 

0

%

 

 

0

%

Exercise price

 

$1.22 - $2.57

 

 

$3.24 - $5.19

 

Fair value of common stock

 

$1.22 - $2.57

 

 

$3.24 - $5.19

 

 

The total intrinsic value of stock options vested during the six months ended June 30, 2023 and 2022 was zero and $0.8 million, respectively.

Restricted Stock Units

Under the terms of the restricted stock unit agreements covering the common stock, shares of common stock related to restricted stock units are subject to time-based and performance-based vesting. The restricted stock units will immediately be forfeited to the Company if the relationship between the recipient and the Company ceases.

Restricted stock activity is summarized as follows:

 

 

NUMBER OF
SHARES

 

 

WEIGHTED-
AVERAGE GRANT
DATE FAIR VALUE

 

Unvested at December 31, 2022

 

 

612,366

 

 

$

1.71

 

Granted

 

 

 

 

$

 

Vested

 

 

 

 

$

 

Forfeited

 

 

 

 

$

 

Unvested at June 30, 2023

 

 

612,366

 

 

$

1.71

 

The aggregate fair value of restricted stock units that vested during the six months ended June 30, 2023 was zero.

Stock-Based Compensation

Stock-based compensation expense for the three and six months ended June 30, 2023 and 2022 was classified in the condensed consolidated statements of operations as follows:

 

 

 

THREE MONTHS ENDED
JUNE 30,

 

 

SIX MONTHS ENDED
JUNE 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Research and development

 

$

302

 

 

$

57

 

 

$

613

 

 

$

199

 

General and administrative

 

 

431

 

 

 

381

 

 

 

853

 

 

 

730

 

Total stock-based compensation expense

 

$

733

 

 

$

438

 

 

$

1,466

 

 

$

929

 

 

As of June 30, 2023 and 2022, total unrecognized compensation cost related to the unvested stock-based awards was $6.5 million and $7.3 million, respectively. As of June 30, 2023 and 2022, these amounts are expected to be recognized over a weighted average period of 2.49 and 2.45 years, respectively.