Note 9 - Share-based Compensation

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

(9) Share-Based Compensation

BioCardia Lifesciences adopted, and the BioCardia Lifesciences shareholders approved, the 2002 Stock Plan in 2002 (2002 Plan), and the Company assumed the 2002 Plan in the Merger. We have not granted or do not intend to grant any additional awards under the 2002 Plan following the Merger. In 2016, BioCardia Lifesciences adopted, and the BioCardia Lifesciences shareholders approved, the 2016 Equity Incentive Plan (2016 Plan), and the Company assumed the 2016 Plan in the Merger. BioCardia has granted awards, including incentive stock options and non-qualified stock options, under the 2016 Plan following the Merger. Under the 2002 Plan and the 2016 Plan, the number of shares, terms, and vesting periods are determined by the Company’s board of directors or a committee thereof on an option-by-option basis. Options generally vest ratably over service periods of four years and expire ten years from the date of grant. The per share exercise price shall be no less than the fair market value on the date of the grant. Compensation cost for employee share-based awards is based on the grant-date fair value and is recognized over the vesting period of the applicable award on a straight-line basis. The number of shares reserved for issuance or transfer pursuant to awards under the 2016 Plan will be increased by (i) the number of shares represented by awards outstanding under 2016 Plan that are returned to the plan because they are either forfeited or lapse unexercised or that are repurchased for the original purchase price thereof, (ii) if approved by the Administrator of the 2016 Plan, an annual increase on the first day of each fiscal year equal to the lessor of (A) 4% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year; (B) 1,000,000 shares. As of December 31, 2023, 361,064 shares were authorized and available for awards under the 2016 Plan.

The Company recognizes in the consolidated statements of operations the grant-date fair value of stock options and other equity-based compensation. Share-based compensation expense for the years ended December 31, 2023 and 2022 was recorded as follows (in thousands):

	Years ended
	December 31,
	2023		2022
Research and development	$	465	$	528
Selling, general and administrative		565		655
Total share-based compensation	$	1,030	$	1,183

The following table summarizes activity under our stock option plans, including the 2002 Plan and the 2016 Plan and related information (in thousands, except share and per share amounts and term):

	Options outstanding
	Number of shares			Weighted average exercise price		Weighted average remaining contractual term (years)		Aggregate intrinsic value (in thousands)
Balance, December 31, 2022		2,182,708		$	4.04		7.5	$	343
Stock options granted		708,284			1.39
Stock options exercised		(199	)		1.49
Stock options forfeited		(397,677	)		2.42
Stock options expired		(6,349	)		16.09
Balance, December 31, 2023		2,486,767		$	3.51		6.8	$	43
Exercisable, December 31, 2023		1,552,294		$	4.56		5.5	$	—
Options vested and expected to vest		2,486,767		$	3.51		6.8	$	43

The aggregate intrinsic value represents the difference between the total pre-tax value (i.e., the difference between the Company’s stock price and the exercise price) of stock options outstanding as of December 31, 2023, based on our common stock closing price of $0.66 per share, which would have been received by the option holders had all their in-the-money options been exercised as of that date.

The total intrinsic value of options exercised was $161 and zero in the years ended December 31, 2023 and 2022, respectively. The weighted average grant-date BSM fair value of options granted during the years ended December 31, 2023 and 2022 was $1.18 and $1.37 per share, respectively.

Employee, Director and Non-employee Share-Based Compensation 

During the years ended December 31, 2023 and 2022, we granted stock options to certain employees, non-employee directors and non-employees to purchase 708,284 and 644,853 shares of common stock, respectively. The fair value of each option grant was estimated on the date of the grant using the BSM option pricing model with the following assumptions: 

	Years ended
	December 31,
	2023			2022
Risk-free interest rate	3.7	-	4.9%	1.8	-	3.8%
Volatility	110	-	120%	116	-	122%
Dividend yield	None			None
Expected term (in years)	6.25	-	10.0	6.25	-	10.0

Unrecognized share-based compensation for employees, non-employee directors and non-employee options granted through December 31, 2023 is approximately $1.4 million to be recognized over a remaining weighted average service period of 2.3 years.

Share-Based Compensation (RSUs)

During the years ended December 31, 2023 and 2022, respectively, we granted to certain members of management 331,552 and 287,839 restricted stock units, or RSUs in lieu of paying bonuses. The fair value of each RSU is estimated on the closing market price of our common stock on the grant date.  

The following table summarizes the activity for RSUs during the year ended December 31, 2023:

				Weighted
				average
				grant date
	Number of			fair value
	shares			per share
Balance, December 31, 2022		21,526		$	4.33
RSUs granted		331,552			1.70
RSUs released		(241,197	)		1.93
RSUs forfeited		(111,881	)		1.70
Balance, December 31, 2023		—		$	n/a

RSUs vested and settled are converted into our common stock on a one-for-one basis. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. The related compensation expense, which is based on the grant date fair value of our common stock multiplied by the number of units granted, is recognized ratably over the period during which the vesting restrictions lapse. Unrecognized share-based compensation for employee and non-employee RSUs granted through December 31, 2023 was $0.