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Note 7 - Stockholders' Equity and Stock-based Compensation Expense | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Shareholders' Equity and Share-Based Payments [Text Block] | 7. Stockholders' Equity and Stock-Based Compensation Preferred Stock The Company’s Board of Directors (the “Board”) has the authority to issue preferred stock in one or more series and to fix the rights, preferences, privileges, restrictions and the number of shares constituting any series or the designation of the series. 2022 Registered Direct Offering On November 22, 2022, the Company completed a common stock offering pursuant to which certain investors purchased 1,666,667 shares of common stock at a price of $30.00 per share. Net proceeds of the offering were approximately $47.3 million after deducting offering expenses. 2021 Registered Direct Offering On February 12, 2021, the Company completed a common stock offering pursuant to which certain investors purchased 4,081,633 shares of common stock at a price of $49.00 per share. Net proceeds of the offering were approximately $189.8 million after deducting offering expenses. At the Market (ATM) Common Stock Issuance On May 1, 2023, the Company entered into an at-the-market offering program (“ATM”) to sell, from time to time, shares of Company common stock having an aggregate offering price of up to $200 million in common stock pursuant to a shelf registration statement that was filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 1, 2023 and became effective immediately upon filing. The Company is obligated to pay a commission of up to 3% of the gross proceeds from the sale of shares of common stock under the ATM. The Company is not obligated to sell any shares in the offering. There were no common stock sales under the ATM during the year ended December 31, 2023. In March 2020, the Company entered into an at-the-market offering program (“2020 Program”) to sell, from time to time, shares of Company common stock having an aggregate offering price of up to $100 million in transactions pursuant to a shelf registration statement that was declared effective by the SEC on May 5, 2020. The Company gave notice of termination for the 2020 Program on April 26, 2023, which was effective May 1, 2023. There were no common stock sales under the 2020 Program through its termination. 2008 Equity Incentive Plan Under the Company’s 2008 Equity Incentive Plan, or 2008 Equity Plan, its employees, directors and consultants received share-based awards, including grants of stock options and performance awards. The 2008 Equity Plan expired in December 2017. Share-based awards generally expire ten years from the date of grant. 2018 Equity Incentive Plan The Company’s Board or a designated Committee of the Board is responsible for administration of the Company’s 2018 Omnibus Incentive Plan (the 2018 Plan) and determines the terms and conditions of each option granted, consistent with the terms of the 2018 Plan. The Company’s employees, directors, and consultants are eligible to receive awards under the 2018 Plan, including grants of stock options and performance awards. Share-based awards generally expire ten years from the date of grant. The 2018 Plan, as amended on May 5, 2022, provides for issuance of up to 5,000,000 shares of common stock, par value $0.001 per share, subject to adjustment as provided in the 2018 Plan. When stock options or performance awards are exercised net of the exercise price and taxes, the number of shares of stock issued is reduced by the number of shares equal to the amount of taxes owed by the award recipient and that number of shares are cancelled. The Company may then use its cash to pay tax authorities the amount of statutory taxes owed by and on behalf of the award recipient. Stock Options The following summarizes information about stock option activity during 2023:
|  |  |  |  |  | Weighted Average |  |  | Weighted Average |  |  |  |  |
|  | Number of |  |  | Weighted Average |  |  | Remaining Contractual |  |  | Aggregate Intrinsic Value |
|  | Options |  |  | Exercise Price |  |  | Term in Years |  |  | in Millions |
Outstanding as of December 31, 2022 |  |  | 2,529,448 |  |  | $ | 12.13 |  |  |  | 3.94 |  |  | $ | 49.60 |
Options granted |  |  | 1,162,000 |  |  |  | 18.91 |  |  |  |  |  |  |  |  |
Options exercised |  |  | (602,420 | ) |  |  | 8.38 |  |  |  |  |  |  |  |  |
Options forfeited/canceled |  |  | (49,999 | ) |  |  | 32.59 |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2023 |  |  | 3,039,029 |  |  |  | — |  |  |  | — |  |  | $ | — |
Vested and expected to vest at December 31, 2023 |  |  | 3,039,029 |  |  |  | 15.13 |  |  |  | 6.21 |  |  | $ | 30.28 |
Exercisable at December 31, 2023 |  |  | 1,836,174 |  |  | $ | 11.09 |  |  |  | 3.98 |  |  | $ | 26.18 |
Of the stock options exercised during the year ended December 31, 2023, 101,058 stock options were net settled in satisfaction of the exercise price, with no cash proceeds received. The following summarizes information about stock options at December 31, 2023 by a range of exercise prices:
|  |  |  |  |  |  |  | Options outstanding |  |  | Options exercisable |
|  |  |  |  |  |  |  |  |  |  |  | Weighted |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  | average |  |  | Weighted |  |  |  |  |  |  | Weighted |
|  |  |  |  |  |  |  | Number of |  |  | remaining |  |  | average |  |  | Number of |  |  | average |
Range of exercise prices |  |  | outstanding |  |  | contractual |  |  | exercise |  |  | vested |  |  | exercise |
From |  |  | To |  |  | options |  |  | life (in years) |  |  | price |  |  | options |  |  | price |
$ | 0.95 |  |  | $ | 3.24 |  |  |  | 804,834 |  |  |  | 4.8 |  |  | $ | 2.17 |  |  |  | 804,834 |  |  | $ | 2.17 |
$ | 4.09 |  |  | $ | 13.02 |  |  |  | 656,230 |  |  |  | 2.9 |  |  | $ | 8.33 |  |  |  | 647,167 |  |  | $ | 8.34 |
$ | 14.21 |  |  | $ | 16.94 |  |  |  | 62,634 |  |  |  | 1.9 |  |  | $ | 16.00 |  |  |  | 62,634 |  |  | $ | 16.00 |
$ | 17.54 |  |  | $ | 17.54 |  |  |  | 800,000 |  |  |  | 9.8 |  |  | $ | 17.54 |  |  |  | 44,442 |  |  | $ | 17.54 |
$ | 21.11 |  |  | $ | 77.00 |  |  |  | 715,331 |  |  |  | 7.2 |  |  | $ | 33.20 |  |  |  | 277,097 |  |  | $ | 41.29 |
|  |  |  |  |  |  |  |  | 3,039,029 |  |  |  | 6.2 |  |  | $ | 15.13 |  |  |  | 1,836,174 |  |  | $ | 11.09 |
The Company uses Black-Scholes to estimate the fair value of options granted. Black-Scholes considers a number of factors, including the market price of the Company’s common stock. Factors utilized in Black-Scholes to value each stock option granted, and the weighted average fair value of options granted during the years ended December 31, 2023, 2022 and 2021 were as follows:
|  | 2023 |  |  | 2022 |  |  | 2021 |
Volatility |  |  | 152% to 155% |  |  |  | 151% to 154% |  |  |  | 147% to 151% |
Risk-free interest rates |  |  | 3.82% to 4.37% |  |  |  | 1.98% to 3.69% |  |  |  | 1.12% to 1.42% |
Expected life of option (in years) |  |  | 7 |  |  |  | 7 |  |  |  | 7 |
Dividend yield |  | zero |  |  | zero |  |  | zero |
Forfeiture rate |  | zero |  |  | zero |  |  | zero |
Weighted average fair value of stock options granted |  | $ | 18.21 |  |  | $ | 35.16 |  |  | $ | 65.83 |
Volatility is based on reviews of the historical volatility of the Company’s common stock. Risk-free interest rates are based on yields of U.S. treasury notes in effect at the date of grant. Expected life of option is based on actual historical option exercises. Dividend yield is zero because the Company does not anticipate paying cash dividends in the foreseeable future. As of December 31, 2023, the Company expects to recognize compensation expense of $24.2 million related to non-vested options held by equity plan participants over the weighted average remaining recognition period of 2.8 years. Performance Awards The following summarizes information about performance award activity during 2023:
|  | Number of Performance Awards |
Outstanding as of December 31, 2022 |  |  | 7,142 |
Granted |  |  | — |
Vested |  |  | — |
Forfeited/canceled |  |  | — |
Outstanding as of December 31, 2023 |  |  | 7,142 |
During the year ended December 31, 2022, a total of 57,143 shares of restricted stock awards expired as performance criteria related to these Performance Awards were not attained. These shares of restricted stock were returned to the 2008 Equity Incentive Plan, which expired in December 2017, and thus were retired. If and when outstanding Performance Awards vest, the Company would recognize $101,000 in stock-based compensation expense. These performance awards expire in 2026. Stock-Based Compensation Expense The following summarizes information about stock-based compensation expense, in thousands:
|  | Years ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Research and development |  | $ | 2,050 |  |  | $ | 1,631 |  |  | $ | 1,302 |
General and administrative |  |  | 2,536 |  |  |  | 435 |  |  |  | 457 |
Total stock-based compensation expense |  | $ | 4,586 |  |  | $ | 2,066 |  |  | $ | 1,759 |

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//505/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//718/tableOfContent + Details
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