XML 24 R15.htm IDEA: XBRL DOCUMENT v3.23.3
Stockholders' Equity
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Stockholders’ Equity

9. Stockholders’ Equity

As of September 30, 2023, the Company’s authorized capital stock consisted of 200,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

The Company had 35,119,248 and 34,414,149 shares of common stock outstanding as of September 30, 2023 and December 31, 2022, respectively.

 

Authorization of Stock Repurchase Program

 

In July 2023, the Company’s board of directors authorized a stock repurchase program pursuant to which the Company may repurchase up to $7.5 million of shares of its common stock through December 31, 2024. Under the program, the Company may repurchase shares of common stock during the term of the program through open market transactions or such other transactions as the Company’s board of directors or designated committee thereof may approve from time to time. The timing and amount of repurchases, if any, will depend on a variety of factors, including the price of the Company’s common stock, alternative investment opportunities, the Company’s cash resources, restrictions under any of the Company’s agreements, corporate and regulatory requirements and market conditions. The Company expects to fund the repurchase of shares of its common stock, if any, under the program with existing cash and cash equivalents. As of September 30, 2023, the Company repurchased 298,385 shares of its common stock under the stock repurchase program for a total of $0.3 million. There have been no repurchases of the Company’s common stock under the stock repurchase program since September 30, 2023 and through the date of the filing of this Quarterly Report on Form 10-Q.

 

Repricing of Outstanding Options

 

On August 7, 2023, the Company’s board of directors approved an option repricing, which was effective on August 14, 2023 (the Effective Date). The repricing applies to outstanding options to purchase shares of the Company’s common stock that, as of the Effective Date, were held by the Company’s employees, officers and certain non-employee directors (the Outstanding Options), to the extent such Outstanding Options have an exercise price in excess of the closing trading price of the Company’s common stock on the Effective Date, and were granted under the Company’s 2017 Equity Incentive Plan or 2018 Equity Incentive Plan (the 2018 Plan). As of the Effective Date, 6,628,589 of the Outstanding Options were immediately repriced such that the exercise price per share for such Outstanding Options was reduced to the closing trading price of the Company’s common stock on the Effective Date, except that a premium exercise price will apply for certain exercises, as further described below. The Outstanding Options that were repriced on the Effective Date (the Repriced Options) included the Outstanding Options held by the Company’s executive officers and certain non-employee directors.

 

If a Repriced Option is exercised prior to the Retention Period End Date (as defined below), or the optionholder’s employment or service terminates under certain circumstances prior to the Retention Period End Date, the optionholder will be required to pay a premium price equivalent to the original exercise price per share of the Repriced Options. The “Retention Period End Date” means the earliest of (i) the date 18 months following the Effective Date, (ii) a Change in Control (as defined in the 2018 Plan), and (iii) the optionholder’s termination of Continuous Service (as defined in the 2018 Plan) as a result of death, disability or certain other not for Cause (as defined in the 2018 Plan) terminations.

 

In addition to the amendment to the exercise prices of the Repriced Options, any Repriced Options that were previously Incentive Stock Options were amended to become Nonstatutory Stock Options (each as defined in the 2018 Plan). There were no changes to the number of shares, the vesting schedule or the expiration date of the Repriced Options.

 

The effect of the repricing resulted in a total incremental non-cash stock-based compensation expense of $1.3 million, which was calculated using the Black-Scholes option-pricing model, of which $0.8 million of the incremental non-cash stock-based compensation expense is associated with vested Repriced Options and will be recognized on a straight-line basis through the Retention Period End Date. The remaining $0.5 million of the incremental non-cash stock-based compensation expense is associated with unvested Repriced Options and will be recognized as follows: (a) if the Retention Period is greater than the remaining original vesting period of the Repriced Option, the incremental cost will be amortized on a straight-line basis through the Retention Period End Date or (b) if the Retention Period is less than the remaining original vesting term of the Repriced Option, the incremental cost will be amortized on a straight-line basis over the remaining original vesting period.

 

During the three and nine months ended September 30, 2023, the Company recognized incremental stock-based compensation expense totaling $0.1 million associated with the repricing which is included in general and administrative and research and development expense on the condensed consolidated statement of operations and comprehensive loss.

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2023:

 

 

 

Outstanding Options

 

 

Weighted-
Average
Exercise Price
Per Share

 

 

Weighted
Average
Remaining
Contractual
Term
(in years)

 

 

Aggregate
Intrinsic Value
(in thousands) (a)

 

Balance as of December 31, 2022

 

 

5,102,501

 

 

$

4.11

 

 

 

 

 

 

 

Granted

 

 

2,433,300

 

 

$

0.99

 

 

 

 

 

 

 

Exercised

 

 

-

 

 

$

-

 

 

 

 

 

 

 

Forfeitures and cancellations

 

 

(367,498

)

 

$

2.43

 

 

 

 

 

 

 

Balance as of September 30, 2023 (b)

 

 

7,168,303

 

 

$

0.91

 

 

 

7.78

 

 

$

29

 

Options exercisable as of September 30, 2023 (b)

 

 

3,574,240

 

 

$

1.05

 

 

 

6.72

 

 

$

4

 

(a) Aggregate intrinsic value in this table was calculated as the positive difference, if any, between the closing price per share of the Company’s common stock on September 29, 2023 of $0.74 and the price of the underlying options.

 

(b) The weighted-average exercise price per share of the options outstanding and exercisable as of September 30, 2023 includes the impact of the repricing of 6,628,589 options on August 14, 2023 at $0.785 per share.

At September 30, 2023, unamortized stock compensation for stock options was $6.3 million, with a weighted-average recognition period of 2.73 years.

Stock-Based Compensation Expense

The non-cash stock-based compensation expense for all stock awards, net of forfeitures recognized as they occur, that was recognized in the condensed consolidated statements of operations is as follows (in thousands):

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Research and development

 

$

366

 

 

$

469

 

 

$

1,153

 

 

$

1,411

 

General and administrative

 

 

613

 

 

 

720

 

 

 

1,798

 

 

 

2,378

 

Total

 

$

979

 

 

$

1,189

 

 

$

2,951

 

 

$

3,789

 

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance is as follows:

 

 

 

 

 

 

 

 

 

 

September 30,
2023

 

 

December 31,
2022

 

Stock options issued and outstanding

 

 

7,168,303

 

 

 

5,102,501

 

Warrants for common stock

 

 

1,366,141

 

 

 

1,366,141

 

Awards available under the 2018 Equity Incentive Plan

 

 

439,236

 

 

 

784,331

 

Employee stock purchase plan

 

 

1,114,887

 

 

 

925,963

 

Total

 

 

10,088,567

 

 

 

8,178,936