XML 24 R12.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

NOTE 6 – STOCK-BASED COMPENSATION

The following table summarizes stock option-based compensation for the three and six months ended June 30, 2020 and 2019:

	For the three months ended June 30,		For the three months ended June 30,		For the six months ended June 30,		For the six months ended June 30,
	2020		2019		2020		2019
Research and development	$	871,000	$	1,009,000	$	1,615,000	$	2,041,000
General and administrative		707,000		669,000		1,219,000		1,740,000
Stock option-based compensation expense included in operating expense		1,578,000		1,678,000		2,834,000		3,781,000

Total stock option-based compensation expense		1,578,000		1,678,000		2,834,000		3,781,000
Tax benefit		-		-		-		-
Stock option-based compensation expense, net of tax	$	1,578,000	$	1,678,000	$	2,834,000	$	3,781,000

Stock Options: 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 June 30,		For the three months ended June 30,		For the six months ended June 30,		For the six months ended June 30,
	2020		2019		2020		2019
Expected volatility		111%		108%		111%		108%
Expected term		6.25 years		5 years		6.25 years		5 years
Risk-free interest rate		0.23%		2.21%		0.30%		2.24%
Expected dividend yield		0%		0%		0%		0%

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

SCHEDULE OF OPTIONS ACTIVITY

	For the three months ended June 30,		For the three months ended June 30,		For the six months ended June 30,		For the six months ended June 30,
	2020		2019		2020		2019
Options granted		1,897,119		1,183,890		3,073,046		1,384,890
Weighted-average:
Exercise price	$	2.83	$	6.86	$	2.30	$	6.84
Grant date fair value	$	2.36	$	5.39	$	1.92	$	5.37

Restricted Common Stock: We granted 1,083,313 shares of restricted common stock during the three and six months ended June 30, 2020. We did not grant any shares of restricted common stock to employees during the three and six months ended June 30, 2019. The following table summarizes restricted common stock compensation expense for the three and six months ended June 30, 2020 and 2019:

	For the three months ended June 30,		For the three months ended June 30,		For the six months ended June 30,		For the six months ended June 30,
	2020		2019		2020		2019
Research and development	$	147,000	$	-	$	472,000	$	-
General and administrative		40,000		78,000		179,000		250,000
Restricted stock-based compensation expense included in operating expense		187,000		78,000		651,000		250,000

Total restricted stock-based compensation expense		187,000		78,000		651,000		250,000
Tax benefit		-		-		-		-
Restricted stock-based compensation expense, net of tax	$	187,000	$	78,000	$	651,000	$	250,000