XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.23.1

Stock-Based Compensation | 3 Months Ended
--- | ---
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 8. Stock-Based Compensation 2022 Equity Inducement Plan On July 1, 2022, the Company’s board of directors approved the 2022 Equity Inducement Plan (the “2022 Plan”), which became effective on that date. The 2022 Plan allows the Company to make equity-based incentive awards to its officers and employees without stockholder approval pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules, or any successor rule relating to inducement awards. Unless earlier terminated by the Board, 2022 Plan will terminate on the ten th anniversary of the effective date. The Company has initially reserved 1,400,000 shares of its common stock for the issuance of awards under the 2022 Plan. As of March 31, 2023, options to purchase 468,205 shares of common stock and 374,560 restricted stock units were outstanding under the 2022 Plan and 557,235 shares remained available for future issuance under the 2022 Plan. 2021 Equity and Incentive Plan On September 27, 2021, the Company’s board of directors and stockholders approved the 2021 Equity and Incentive Plan (the “2021 Plan”), which became effective on October 7, 2021, when the Company’s registration statement was declared effective by the SEC. The 2021 Plan allows the Company to make equity-based and cash-based incentive awards to its officers, employees, directors and consultants. The Company has initially reserved 3,852,807 shares of its common stock for the issuance of awards under the 2021 Plan. The number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase annually on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022, and continuing until (and including) the fiscal year ending December 31, 2031 by the lesser of (i) 5% of the total number of shares of common stock outstanding on December 31st of the immediately preceding fiscal year and (ii) the number of shares as may be determined by the board of directors. As a result of the evergreen provision of the 2021 Plan, the Company added an additional 1,755,501 shares of common stock to the 2021 Plan as of January 1, 2023. The maximum number of shares of common stock that may be issued pursuant to the exercise of incentive options under the 2021 Plan is 7,705,614. Unless earlier terminated by the Board, 2021 Plan will terminate on the ten th anniversary of the effective date. As of March 31, 2023, options to purchase 2,668,559 shares of common stock and 4,471,264 restricted stock units were outstanding under the 2021 plan and 42,892 shares remained available for future issuance under the 2021 plan. 2019 Equity Incentive Plan In 2019, the Company established the 2019 Equity and Incentive Plan (the "2019 Plan"), under which the Company is allowed to grant options and restricted stock to its employees and non-employees. The maximum number of shares of common stock reserved for issuance under the 2019 Plan is 4,042,408 shares. Options granted under the 2019 Plan include incentive stock options that can be granted only to the Company’s employees and non-statutory stock options that can be granted to the Company’s employees, consultants, advisors and directors. The 2019 Plan also permits the Company to issue restricted stock awards. Unless earlier terminated by the Board, the 2019 Plan will terminate on the tenth anniversary of the effective date. As of March 31, 2023, options to purchase 2,570,013 shares of common stock and 832,873 restricted stock units were outstanding under the 2019 Plan and zero shares remained available for future issuance under the 2019 Plan. 2021 Employee Stock Purchase Plan On September 27, 2021, the Company’s board of directors and stockholders approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective on October 7, 2021, when the Company’s registration statement was declared effective by the SEC. The 2021 ESPP initially reserved and authorized the issuance of up to a total of 424,595 shares of common stock to participating employees. The number of shares of common stock reserved for issuance under the ESPP will automatically increase annually on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022, and continuing until (and including) the fiscal year ending December 31, 2031 by the lesser of (1) 1% of the total number of shares of common stock outstanding on December 31st of the immediately preceding fiscal year and (ii) the number of shares as may be determined by the board of directors. As a result of the evergreen provision of the 2021 ESPP, the Company added an additional 351,100 shares of common stock to the 2021 ESPP as of January 1, 2023. No shares are issued under 2021 ESPP plan as of the date of issuance of these condensed consolidated financial statements. As of March 31, 2023, the authorized number of shares and shares available for issuance under the 2021 ESPP is 1,103,624. Repricing of Outstanding and Unexercised Options On March 24, 2023 and in accordance with the terms of the 2019 Plan, the board of directors approved a stock option repricing (the “Repricing”) where the exercise price of each Relevant Option (as defined below) was reduced to $2.21 per share, the closing stock price on the date of approval by the board of directors. “Relevant Options” are all outstanding stock options as of March 24, 2023 (vested or unvested) to acquire shares of the Company’s common stock that were issued to current employees of the Company under the 2019 Plan prior to the Company’s IPO. Members of the board of directors did not participate in the Repricing. The board of directors believes that the Repricing is in the best interests of the Company, as the amended stock options will provide added incentives to retain and motivate key contributors of the Company without incurring the stock dilution resulting from significant additional equity grants or significant additional cash expenditures resulting from additional cash compensation. The board of directors also believes that the Repricing better aligns the interests of the key contributors with the goals of the Company. The option repricing resulted in incremental stock-based compensation of $1.1 million, of which $0.7 million was recorded as expense in the three months ended March 31, 2023. The remaining expense will be recognized over the requisite service period in which the stock options vest. Stock Options Stock options granted under the 2022 Plan, 2021 Plan and 2019 Plan (together, the “Plans”) to employees generally vest over four years and expire after 10 years. The summary of stock option activity for the three months ended March 31, 2023 (in thousands, except share and per share amounts):
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |  |
Outstanding at January 1, 2023 |  |  | 5,720,415 |  |  | $ | 9.68 |  |  |  | 8.8 |  |  | $ | 72 |  |
Granted |  |  | 67,513 |  |  |  | 4.01 |  |  |  |  |  |  |  |
Expired |  |  | (81,151 | ) |  |  | 5.46 |  |  |  |  |  |  |  |
Outstanding at March 31, 2023 |  |  | 5,706,777 |  |  | $ | 7.94 |  | (1) |  | 8.5 |  |  | $ | 5,282 |  | (1)
Options exercisable at March 31, 2023 |  |  | 2,320,405 |  |  | $ | 7.24 |  | (1) |  | 8.3 |  |  | $ | 2,540 |  | (1)
(1) | The weighted average exercise price and aggregate intrinsic value as of March 31, 2023 reflect the impact of the stock option repricing discussed above.
The weighted-average grant date fair value of options granted during the three months ended March 31, 2023 and 2022, was $3.19 and $6.27 per share, respectively. The aggregate intrinsic value is calculated as the difference between the exercise price of all outstanding and exercisable stock options and the fair value of the Company’s common stock of $4.01 per share as of March 31, 2023. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2023 and 2022 was $0, as no stock options were exercised during the three months ended March 31, 2023, and less than $0.1 million, respectively. The Company estimated the fair value of each option on the date of grant using the Black-Scholes option-pricing model applying the range of assumptions in the following table:
|  | Three Months Ended March 31, |
|  | 2023 |  | 2022 |
Expected volatility |  | 97.82% |  | 98.05% - 101.66% |
Risk-free interest rate |  | 3.58% |  | 1.60% |
Expected dividend yield |  | 0.00% |  | 0.00% |
Expected term (in years) |  | 6.08 |  | 6.08 |
Stock-based compensation expense related to stock options is as follows (in thousands):
|  | Three Months Ended March 31, |  |
|  | 2023 |  |  | 2022 |  |
Research and development |  | $ | 1,243 |  |  | $ | 472 |  |
General and administrative |  |  | 2,141 |  |  |  | 2,874 |  |
Total |  | $ | 3,384 |  |  | $ | 3,346 |  |
The Company has an aggregate $23.1 million of gross unrecognized stock-based compensation expense as of March 31, 2023, remaining to be amortized over a weighted average period of 2.07 years. The Company has not recognized and does not expect to recognize in the near future, any tax benefit related to employee stock-based compensation expense as a result of the full valuation allowance related to its net deferred tax assets. Restricted Stock Awards Under the 2019 Plan, 2021 Plan and 2022 Inducement Plan, the Company issued 2,879,832 restricted stock units ("RSUs") to employees and non-employees. Compensation costs related to these RSUs were recorded based on the Company's stock price on the date of issuance and amortized over the service period. Additionally, the Company issued certain shares of restricted common stock ("RSA") to the employee co-founders and certain non-employee consultants in 2019. The shares of restricted common stock were issued pursuant to standalone restricted stock purchase agreements that are independent of the 2019 Plan, 2021 Plan and 2022 Inducement Plan. The shares of restricted common stock pursuant to standalone restricted stock purchase agreements carried a purchase price equivalent of $0.01 per share. As of March 31, 2023 56,023 RSAs were unvested and outstanding. Under the terms of the restricted stock purchase agreements, the Company has a repurchase option whereby it has the right to repurchase any unvested shares upon termination at a price per share equal to the lesser of (i) the fair market value of the Company’s common stock on the date of repurchase and (ii) the original purchase price. The shares of restricted common stock issued to the Company’s co-founders and non-employee consultants vest based on a predefined number of shares. The Company recognized an associated deposit liability for restricted stock awards issued pursuant to standalone restricted stock purchase agreements upon issuance based on the purchase price of the awards as the unvested shares are subject to repurchase upon termination. As the awards of restricted stock vest, the Company reclassifies the deposit liability to additional paid-in capital. The compensation cost was measured based on the fair value of the underlying common stock less the purchase price of the restricted common stock and the Company recognizes compensation costs over the requisite service period. The summary of restricted stock activity for the three months ended March 31, 2023:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Non-vested at January 1, 2023 |  |  | 3,015,387 |  |  | $ | 3.64 |
Granted |  |  | 2,879,832 |  |  |  | 2.19 |
Vested and settled |  |  | (148,047 | ) |  |  | 0.55 |
Non-vested and unsettled at March 31, 2023 |  |  | 5,747,172 |  |  | $ | 2.96 |
The Company has recorded stock-based compensation expense related to the restricted stock of $1.5 million and $58 thousand for the three months ended March 31, 2023 and 2022, respectively. The Company has an aggregate $12.2 million of gross unrecognized restricted stock-based compensation expense as of March 31, 2023 remaining to be amortized over a weighted average period of 2.59 years.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (l) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a)(1) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration