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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation 2021 Equity Incentive Plan In June 2021 the Company's stockholders approved the 2021 Omnibus Equity Incentive Plan ("2021 Plan"). The number of authorized shares in the 2021 plan is equal to the sum of (i) 3,150,000 shares, plus (ii) the number of shares of Common Stock reserved, but unissued under the 2014 Plan; and (iii) the number of shares of Common Stock underlying forfeited awards under the 2014 Plan. On June 9, 2022 the shareholders approved an increase of shares authorized in the 2021 Plan to 5,150,000. As of December 31, 2022, there were 3,087,075 shares available for issuance under the 2021 Plan. 2014 Equity Incentive Plan Subsequent to the adoption of the 2021 Plan, no additional equity awards can be made under the terms of the 2014 Plan. Inducement Grants In July 2021, the Company began issuing equity awards to certain new employees as inducement grants outside of its 2021 Plan. As of December 31, 2022, an aggregate of 920,208 shares were issuable upon the exercise of inducement grant stock options approved by the Company. Modification of Stock Options In June 2022 one of the Company's directors did not seek another term on the Board of Directors. At the time of departure, the Compensation Committee passed a resolution to extend the expiration date of the vested stock options, and to immediately accelerate the vesting of the unvested options. The Company recorded incremental reduction to stock compensation expense of $0.1 million during the year ended December 31, 2022, related to the modifications. In June 2021 two of the Company's directors' terms ended. At the conclusion of their term, the Compensation Committee passed a resolution to extend the expiration date of the departing directors vested stock options, and to immediately accelerate the vesting of one of the directors unvested options. The Company recorded incremental stock compensation expenses of $0.6 million during the year ended December 31, 2021, related to the modifications. Stock-based compensation has been recognized in operating results as follows:
(in thousands) | Years ended December 31,
| 2022 |  | 2021 |  |
Research and development expenses | 1,035 |  |  | 491 |  |  |
Selling, general and administrative expenses | 3,221 |  |  | 2,743 |  |  |
Total stock-based compensation | $ | 4,256 |  |  | $ | 3,234 |  |  |
Stock Options The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following assumptions during the years indicated below:
| Years ended December 31,
| 2022 |  | 2021 |  |
Risk-free interest rate | 1.62% - 3.75% |  | 0.83% - 1.3% |  |
Dividend yield | 0% |  | 0% |  |
Expected volatility (range) | 98% - 110% |  | 107% - 110% |  |
Expected volatility (weighted-average) | 106% |  | 108% |  |
Expected term (in years) | 6.0 years |  | 6.0 years |  |
Risk-free interest rate — Based on the daily yield curve rates for U.S. Treasury obligations with maturities that correspond to the expected term of the Company’s stock options. Dividend yield — Cardiff Oncology has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. Expected volatility — Based on the historical volatility of Cardiff Oncology’s common stock. Expected term — The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method, which represents the Company's best estimate following the Company's restructuring in 2018. This method averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options. Options are considered to be “plain vanilla” if they have the following basic characteristics: (1) are granted “at-the-money”; (2) exercisability is conditioned upon service through the vesting date; (3) termination of service prior to vesting results in forfeiture; (4) limited exercise period following termination of service; and (5) are non-transferable and non-hedgeable. Forfeitures — The Company estimates forfeitures based on its historical experience. The weighted-average fair value per share of all options granted during the years ended December 31, 2022 and 2021, estimated as of the grant date using the Black-Scholes option valuation model, was $2.55 and $5.96 per share, respectively. The unrecognized compensation cost related to non-vested stock options outstanding at December 31, 2022 was $8.8 million. The weighted-average remaining amortization period at December 31, 2022 for non-vested stock options was 2.6 years. The total fair value of shares vested during the years ended December 31, 2022 and 2021 was $4.7 million and $1.2 million, respectively. A summary of stock option activity and of changes in stock options outstanding is presented below:
| Number of Options |  | Weighted-Average Exercise Price Per Share |  | Intrinsic Value |  | Weighted-Average Remaining Contractual Life
Balance outstanding, December 31, 2021 | 3,771,984 |  |  | $ | 7.13 |  |  | $ | 6,405,258 |  |  | 8.7 years
Granted | 1,737,760 |  |  | $ | 3.15 |  |  |  |  |
Exercised | (28,858) |  |  | $ | 2.60 |  |  | $ | 1,443 |  |  |
Cancelled | (398,156) |  |  | $ | 4.62 |  |  |  |  |
Expired | (13,272) |  |  | $ | 32.52 |  |  |  |  |
Balance Outstanding, December 31, 2022 | 5,069,458 |  |  | $ | 5.92 |  |  | $ | 19,322 |  |  | 7.4 years
Vested and exercisable, December 31, 2022 | 2,300,619 |  |  | $ | 7.38 |  |  | $ | 12,210 |  |  | 5.7 years
Vested and expected to vest, December 31, 2022 | 4,990,351 |  |  | $ | 5.94 |  |  | $ | 18,752 |  |  | 7.4 years

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