STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 6 – STOCK-BASED COMPENSATION

Stock Options: The following table summarizes stock option-based compensation for the three and nine months ended September 30, 2021 and 2020:

	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Research and development	$	432,000	$	765,000	$	1,649,000	$	2,380,000
General and administrative		955,000		484,000		2,148,000		1,703,000
Stock option-based compensation expense included in operating expense	$	1,387,000	$	1,249,000	$	3,797,000	$	4,083,000

We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model. We then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:

● Expected volatility - we estimate the volatility of our share price at the date of grant using a “look-back” period which coincides with the expected term, defined below. We believe using a “look-back” period which coincides with the expected term is the most appropriate measure for determining expected volatility.

● Expected term - we estimate the expected term using the “simplified” method, as outlined in Staff Accounting Bulletin No. 107, “Share-Based Payment.”

● Risk-free interest rate - we estimate the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.

● Dividends - we use an expected dividend yield of zero because we have not declared or paid a cash dividend, nor do we have any plans to declare a dividend.

We used the following weighted-average assumptions to estimate the fair value of the options granted for the periods indicated:

	For the three months ended September 30,						For the nine months ended September 30,
	2021			2020			2021			2020
Expected volatility		92	%		110	%		97	%		111	%
Expected term		6.08 years			6.25 years			5.97 years			6.25 years
Risk-free interest rate		0.97	%		0.16	%		0.98	%		0.29	%
Expected dividend yield		0	%		0	%		0	%		0	%

The following table summarizes the options granted for the periods indicated:

	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Options granted		1,028,000		342,100		4,383,308		3,415,146
Weighted-average:
Exercise price	$	1.25	$	3.08	$	1.86	$	2.38
Grant date fair value	$	0.94	$	2.56	$	1.44	$	1.99

Restricted Common Stock: The following table summarizes restricted common stock compensation expense for the three and nine months ended September 30, 2021 and 2020:

	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Research and development	$	256,000	$	89,000	$	1,286,000	$	561,000
General and administrative		894,000		72,000		1,832,000		251,000
Restricted stock-based compensation expense included in operating expense	$	1,150,000	$	161,000	$	3,118,000	$	812,000

The following table summarizes the restricted common stock granted for the periods indicated:

	For the three months ended September 30,						For the nine months ended September 30,
	2021			2020			2021			2020
Restricted common stock granted		767,934			-			2,743,668			1,083,313
Restricted common stock forfeited		(293,109	)		(265,080	)		(721,768	)		(265,080	)
Weighted-average:
Grant date fair value-granted awards	$	1.24		$	-		$	1.77		$	3.19
Grant date fair value-forfeited awards	$	1.93		$	3.18		$	1.90		$	3.18