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Note 2 - Stock-based Compensation | 6 Months Ended
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Jun. 30, 2020
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] | Note 2 - Stock-Based Compensation As of June 30, 2020, the Company had three stock-based employee compensation plans: the Amended and Restated Stock Incentive Plan (“Incentive Plan”), the Amended and Restated Inducement Equity Incentive Plan (“Inducement Plan”) and the Amended and Restated Employee Stock Purchase Plan (“ESPP”). The Incentive Plan was amended and restated on March 19, 2020 and approved by the Company’s stockholders on May 12, 2020. The Inducement Plan was adopted by the Board of Directors on April 24, 2019 and amended and restated by the Board of Directors in February 2020 and in July 2020. The ESPP was amended and restated in March 2020 and approved by the Company’s stockholders in May 2020. Stock-based compensation expense of $6,034 ($5,205 of expense related to the Incentive Plan, $710 of expense related to the Inducement Plan, and $119 of expense related to the ESPP) was recognized during the first six months of 2020, while $8,702 ($8,535 of expense related to the Incentive Plan, $16 of expense related to the Inducement Plan and $151 of expense related to the ESPP) was recognized during the first six months of 2019. There was approximately $22,873 of total unrecognized compensation cost related to non-vested stock option awards granted by the Company as of June 30, 2020. That cost is expected to be recognized as follows: $5,251 during the remainder of 2020, $8,086 in 2021, $6,604 in 2022, $2,668 in 2023 and $264 in 2024. In addition, the Company has outstanding performance-based stock options for which no compensation expense is recognized until “performance” has occurred and the award vests. Stock Incentive Plan The Company grants stock option awards and restricted stock unit awards to its employees, directors, and consultants under the Incentive Plan. Under the Incentive Plan, stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Stock option awards and restricted stock units granted to employees generally vest 25% each year until fully vested after four years. In August 2013, December 2014 and December 2019, the Company issued 1,032, 1,250 and 315 performance-based stock options, respectively. These awards vest upon successful completion of specific development milestones. As of June 30, 2020, 75% of the August 2013 grants have vested. As of June 30, 2020, 85% of the December 2014 grants have vested. As of June 30, 2020, none of the December 2019 grants have vested. During the three months ended June 30, 2020, the Company recognized $86 of compensation expense related to one milestone within the December 2019 grants for which achievement became probable. During 2019, the Company recognized $4,998 of stock compensation expense related to two milestones within the December 2014 grants for which achievement became probable. Stock option awards granted to non-employee directors of the Company generally vest over one year. All stock option awards have contractual terms of 10 years. The vesting and exercise provisions of all awards granted under the Incentive Plan are subject to acceleration in the event of certain stockholder-approved transactions, or upon the occurrence of a change in control as defined in the Incentive Plan.
Related activity under the Incentive Plan is as follows: |  |  |  |
|  |  |  |  |  |  |  |  |  | Weighted |
|  |  |  |  |  |  |  |  |  | Average |
|  | Awards |  |  | Options |  |  | Exercise |
|  | Available |  |  | Outstanding |  |  | Price |
Balance December 31, 2019 |  |  | 968 |  |  |  | 21,050 |  |  | $ | 5.96 |
Plan amendment |  |  | 8,000 |  |  |  | - |  |  |  | - |
Restricted stock unit awards granted |  |  | (22 | ) |  |  | - |  |  |  | - |
Restricted stock unit awards cancelled |  |  | - |  |  |  | - |  |  |  | - |
Stock option awards granted |  |  | (547 | ) |  |  | 547 |  |  |  | 4.87 |
Stock option awards exercised |  |  | - |  |  |  | (193 | ) |  |  | 2.76 |
Stock option awards cancelled |  |  | 2,495 |  |  |  | (2,495 | ) |  |  | 6.66 |
Balance June 30, 2020 |  |  | 10,894 |  |  |  | 18,909 |  |  | $ | 5.85 |
For stock option awards granted under the Incentive Plan during the first six months of 2020 and 2019, the fair value was estimated on the date of grant using a Black-Scholes option pricing model and the assumptions noted in the table below. The weighted average grant date fair value per share of the awards granted during the first six months of 2020 and 2019 was $3.35 and $4.69, respectively. The fair value of the stock option awards is amortized to expense over the vesting periods using a straight-line expense attribution method. Inducement Equity Incentive Plan The Company has the ability to grant stock option awards to newly-hired employees as inducements material to each employee entering employment with the Company. Stock option awards granted to newly hired employees are granted with an exercise price equal to the market price of the Company’s stock at the date of grant and generally vest 25% each year until fully vested after four years. Each stock option has a term of 10 years and is subject to the terms and conditions of the Inducement Plan. The vesting and exercise provisions of all awards granted under the Inducement Plan are subject to acceleration in the event of certain stockholder-approved transactions, or upon the occurrence of a change in control as defined in the Inducement Plan.
Related activity under the Inducement Plan is as follows: |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Weighted |
|  |  |  |  |  |  |  |  |  | Average |
|  | Awards |  |  | Options |  |  | Exercise |
|  | Available |  |  | Outstanding |  |  | Price |
Balance December 31, 2019 |  |  | 171 |  |  |  | 1,329 |  |  | $ | 3.60 |
Plan amendment |  |  | 1,700 |  |  |  | - |  |  |  | - |
Stock option awards granted |  |  | (1,502 | ) |  |  | 1,502 |  |  |  | 3.34 |
Stock option awards exercised |  |  | - |  |  |  | - |  |  |  | - |
Stock option awards cancelled |  |  | 145 |  |  |  | (145 | ) |  |  | 4.28 |
Balance June 30, 2020 |  |  | 514 |  |  |  | 2,686 |  |  | $ | 3.42 |
For stock option awards granted under the Inducement Plan during the first six months of 2020 and 2019, the fair value was estimated on the date of grant using a Black-Scholes option pricing model and the assumptions noted in the table below. The weighted average grant date fair value per share of the awards granted during the first six months of 2020 and 2019 was $3.67 and $3.94, respectively. The following table summarizes the key assumptions used by the Company to value the stock option awards granted under the Incentive Plan and the Inducement Plan during the first six months of 2020 and 2019, respectively. The expected life is based on the average of the assumption that all outstanding stock option awards will be exercised at full vesting and the assumption that all outstanding stock option awards will be exercised at the midpoint of the current date (if already vested) or at full vesting (if not yet vested) and the full contractual term. The expected volatility represents the historical volatility on the Company’s publicly traded common stock. The Company has assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future. The weighted average risk-free interest rate is the implied yield currently available on zero-coupon government issues with a remaining term equal to the expected term. Weighted Average Assumptions for Stock Option Awards Granted to Employees and Directors under the Plans
|  | 2020 |  |  | 2019 |
Expected Life in Years |  |  | 5.5 |  |  |  | 5.5 |
Expected Volatility |  |  | 83.7 | % |  |  | 81.0 | %
Expected Dividend Yield |  |  | 0.0 | % |  |  | 0.0 | %
Risk-Free Interest Rate |  |  | 0.5 | % |  |  | 2.3 | %
Employee Stock Purchase Plan (“ESPP”) The Company has reserved a total of 4,475 shares of common stock to be purchased under the ESPP, of which 3,009 shares remain available for purchase at June 30, 2020. Eligible employees may authorize up to 15% of their salary to purchase common stock at the lower of 85% of the beginning or 85% of the ending price during six-month purchase intervals. No more than 3 shares may be purchased by any one employee at the six-month purchase dates, and no employee may purchase stock having a fair market value at the commencement date of $25 or more in any one calendar year. The Company issued 110 shares during the first six months of 2020 under the ESPP. Compensation expense for shares purchased under the ESPP related to the purchase discount and the “look-back” option were determined using a Black-Scholes option pricing model.

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