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Stock Based Compensation | 9 Months Ended
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Sep. 30, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock Based Compensation |
6. | Stock-Based Compensation
2018 Omnibus Incentive Plan In June 2018, stockholders of the Company approved the Company’s 2018 Omnibus Incentive Plan (the “2018 Plan”). The 2018 Plan had previously been approved by the Company’s Board of Directors (the “Board”) and the Compensation Committee (the “Committee”) of the Board, subject to stockholder approval. The 2018 Plan became effective on June 13, 2018. On June 9, 2021, the stockholders of the Company approved an amendment to the 2018 Plan to increase the number of shares of common stock reserved for issuance by 2,500,000 shares to a total of 5,300,000 shares. The amendment became effective immediately upon stockholder approval. Performance-Based Stock Option Grants In February 2021, the Committee approved the issuance of option grants to purchase 647,000 shares of common stock for executive officers pursuant to the 2018 Plan, which will vest upon (a) the achievement of specified performance goals and (b) the grantees’ continued employment during the service period specified in each grant. The following table summarizes stock option activity under the Company’s 2018 Plan and related information:
|  | Number of Shares Underlying Outstanding Options |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (Years) |
Outstanding — December 31, 2020 |  |  | 2,355,615 |  |  | $ | 8.59 |  |  |  | 8.0 |
Options granted |  |  | 1,301,238 |  |  | $ | 5.73 |  |  |  |  |
Options exercised |  |  | (5,000 | ) |  | $ | 4.63 |  |  |  |  |
Options forfeited |  |  | (631,827 | ) |  | $ | 6.73 |  |  |  |  |
Options expired |  |  | (569 | ) |  | $ | 582.27 |  |  |  |  |
Outstanding — September 30, 2021 |  |  | 3,019,457 |  |  | $ | 7.65 |  |  |  | 7.9 |
Exercisable — September 30, 2021 |  |  | 1,468,499 |  |  | $ | 9.39 |  |  |  |  |
Valuation Assumptions The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing model and a single option award approach. Due to its limited history as a public company and limited number of sales of its common stock, the Company estimated its volatility considering a number of factors including the use of the volatility of comparable public companies. The expected term of options granted under the Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. This fair value is being amortized ratably over the requisite service periods of the awards, which is generally the vesting period. The fair value of employee stock options was estimated using the following weighted-average assumptions:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Employee Stock Options: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk-free rate |  | 0.91% |  |  | 0.39% |  |  | 0.76% |  |  | 0.96% |
Expected term (in years) |  |  | 6.0 |  |  |  | 6.1 |  |  |  | 6.0 |  |  |  | 5.8 |
Dividend yield |  | 0.00% |  |  | 0.00% |  |  | 0.00% |  |  | 0.00% |
Volatility |  | 90.95% |  |  | 115.62% |  |  | 93.34% |  |  | 112.87% |
Weighted-average fair value of stock options granted |  | $ | 3.23 |  |  | $ | 4.61 |  |  | $ | 4.31 |  |  | $ | 5.17 |
Total stock-based compensation expense recognized was as follows (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Research and development |  | $ | 158 |  |  | $ | 493 |  |  | $ | 921 |  |  | $ | 1,151 |
General and administrative(1) |  |  | 555 |  |  |  | 575 |  |  |  | 1,801 |  |  |  | 1,556 |
Total stock-based compensation expense |  | $ | 713 |  |  | $ | 1,068 |  |  | $ | 2,722 |  |  | $ | 2,707 |
(1) | Included in general and administrative for the three and nine months ended September 30, 2021 is stock-based compensation expense related to 15,961 shares and 39,823 shares, respectively, of common stock issued to certain board members in lieu of their cash compensation.
As of September 30, 2021, 3,037,815 shares of common stock were available for future grant and 3,019,457 options to purchase shares of common stock were outstanding. As of September 30, 2021, the Company had unrecognized employee stock-based compensation expense of $5.3 million, related to unvested stock awards, which is expected to be recognized over an estimated weighted-average period of 2.6 years.

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