XML 29 R19.htm IDEA: XBRL DOCUMENT
v3.21.2

Stock Compensation | 6 Months Ended
--- | ---
Jun. 30, 2021
Share-based Payment Arrangement [Abstract] |
Stock Compensation |
12. | STOCK COMPENSATION
In 2011 Private Tempest adopted the 2011 Equity Incentive Plan, and in 2017, Private Tempest adopted the 2017 Equity Incentive Plan, together “the Plans”. Upon adoption of the 2017 Equity Incentive Plan, the 2011 Equity Incentive Plan was terminated. Both the Plans provide for the granting of stock awards to employees, directors and consultants of the Company. Awards issuable under the Plans include incentive stock options (“ISO”), nonqualified stock options (“NSO”), stock appreciation rights (“SAR”), restricted stock awards, restricted stock unit awards and other stock awards. As a result of the merger, the Plans of Private Tempest were assumed by the Company. Options to purchase the Company’s common stock may be granted at a price not less than the fair market value in the case of both NSOs and ISOs, except for an employee or non-employee with options who owns more than 10 percent of the voting power of all classes of stock of the Company, in which case the exercise price shall be no less than 110 percent of the fair market value per share on the grant date. Stock options granted under the Plans generally vest over four years and expire no later than ten (10) years from the date of grant. Vested options can be exercised at any time. The grant date fair market value of the shares of common stock underlying stock options has historically been determined by the Company’s Board of Directors. Because there has been no public market for the Company’s common stock, the Board of Directors exercises reasonable judgment and considers a number of objective and subjective factors to determine the best estimate of the fair market value, which include valuations performed by an independent third-party, important developments in the Company’s operations, sales of convertible preferred stock, actual operating results, financial performance, the conditions in the life sciences industry, the economy in general, the stock price performance and volatility of comparable public companies, and the lack of liquidity of the Company’s common stock. Stock option activity under the Plans is set forth below:
|  |  |  |  |  |  |  | Weighted- |
|  | Shares |  |  |  |  |  | Average |
|  | Available |  |  | Total Options |  |  | Exercise |
|  | for Grant |  |  | Outstanding |  |  | Price |
Balance—January 1, 2021 |  |  | 489,797 |  |  |  | 452,165 |  |  | $ | 5.35 |
Assumed in reverse recapitalization |  |  | — |  |  |  | 178,732 |  |  |  | 178.64 |
Granted |  |  | (186,482 | ) |  |  | 186,482 |  |  |  | 20.99 |
Exercised |  |  | — |  |  |  | (10,654 | ) |  |  | 4.60 |
Cancelled and forfeited |  |  | 5,667 |  |  |  | (6,316 | ) |  |  | 18.36 |
Balance—June 30, 2021 |  |  | 308,982 |  |  |  | 800,409 |  |  |  | 47.70 |
The following table summarizes information about stock options outstanding at June 30, 2021:
|  |  |  |  | Weighted |  |  |  |  |  |  |
|  |  |  |  | Average |  |  | Weighted |  |  |  |
|  |  |  |  | Remaining |  |  | Average |  |  | Aggregate |
|  |  |  |  | Contractual |  |  | Exercise |  |  | Intrinsic |
|  | Shares |  |  | Life (In Years) |  |  | Price |  |  | Value |
Options outstanding |  |  | 800,409 |  |  |  | 8.46 |  |  | $ | 47.70 |  |  | $ | 2,594,131 |
Vested and expected to vest |  |  | 799,823 |  |  |  | 8.46 |  |  | $ | 47.63 |  |  | $ | 2,593,281 |
Exercisable |  |  | 366,374 |  |  |  | 7.64 |  |  | $ | 89.59 |  |  | $ | 1,133,181 |
Employee Stock Options —During the six months ended June 30, 2021, the Company granted employees stock options to purchase 184,872 shares of common stock with a weighted-average grant date fair value of $12.70 per share. As of June 30, 2021, there was total unrecognized compensation costs related to unvested employee stock options of $3,047. These costs are expected to be recognized over a weighted-average period of approximately 1.6 years. The Company estimated the fair value of stock options using the Black-Scholes option pricing valuation model. The fair value of employee stock options is being amortized on the straight-line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using the following assumptions for the six months ended June 30, 2021:
Expected term (in years) |  |  | 6.0 – 6.1 |
Expected volatility |  |  | 67% |
Risk-free interest rate |  |  | 1.0% – 1.1% |
Dividends |  |  | 0% |
Expected Term —The expected term of options granted represents the period of time that the options are expected to be outstanding. Due to the lack of historical exercise history, the expected term of the Company’s employee stock options has been determined utilizing the simplified method for awards that qualify as plain-vanilla options. Expected Volatility —The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have any trading history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available. Risk -Free Interest Rate —The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. Dividends —The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used. Non -Employee Stock Options — During the six months ended June 30, 2021, the Company granted non-employees stock options to purchase 1,610 shares of common stock with a weighted-average grant date fair value of $7.46 per share. As of June 30, 2021, there was total unrecognized compensation costs related to unvested non-employee stock options of $25. These costs are expected to be recognized over a weighted-average period of approximately 1.3 years. The Company estimated the fair value of stock options using the Black-Scholes option pricing valuation model. The fair value of non-employee stock options is being amortized on the straight-line basis over the requisite service period of the awards. The fair value of non-employee stock options was estimated using the following assumptions for the six months ended June 30, 2021:
Expected term (in years) |  |  | 10 |
Expected volatility |  |  | 66 | %
Risk-free interest rate |  |  | 1.50 | %
Dividends |  |  | 0 | %
Expected Term —The expected term of options granted represents the period of time that the options are expected to be outstanding. The Company has valued its non-employee stock options using the contractual term as the expected term. Expected Volatility —The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have any trading history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available. Risk -Free Interest Rate —The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. Dividends —The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used. Stock -Based Compensation Expense —The following table summarizes the components of stock-based compensation expense recognized in the Company’s statement of operations for the three and six months ended June 30, 2021 and 2020:
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Research and development |  | $ | 45 |  |  | $ | 176 |  |  | $ | 122 |  |  | $ | 231 |
General and administrative |  |  | 366 |  |  |  | 51 |  |  |  | 409 |  |  |  | (1 | )
|  | $ | 411 |  |  | $ | 227 |  |  | $ | 531 |  |  | $ | 230 |

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum: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