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8. Equity Incentive Plan – Stock-Based Compensation Expense and Common Stock Warrants
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
8. Equity Incentive Plan – Stock-Based Compensation Expense and Common Stock Warrants

8. Equity Incentive Plan – Stock-Based Compensation Expense and Common Stock Warrants

 

2021 Omnibus Equity Incentive Plan

 

On July 19, 2021, the Company’s Board of Directors adopted the RenovoRx, Inc. 2021 Omnibus Equity Incentive Plan (the “2021 Plan”). The 2021 Plan, which became effective immediately prior to the closing of the IPO, initially reserved 2,185,832 shares of common stock, which included 10,832 shares of common shares reserved but unissued under the Amended and Restated 2013 Equity Incentive Plan (the “2013 Plan”). The Company’s 2013 Plan was terminated immediately prior to the closing of the IPO; however, shares subject to awards granted under the 2013 Plan will continue to be governed by the 2013 Plan. In accordance with the terms of the 2021 Plan, on January 1, 2023, the number of shares reserved and available for issuance increased by 272,391 shares.

 

A summary of the stock option activity for the year ended December 31, 2022 is as follows:

 

  

Number of

Stock

Options

  

Weighted-

Average Exercise Price

  

Weighted-

Average

Remaining

Contractual Life

  

Aggregate

Intrinsic

Value

 
Outstanding as of December 31, 2021   926,379   $2.08    6.47   $2,856 
Granted   724,937   $2.42    -   $- 
Exercised   (160,212)  $0.26    -   $- 
Forfeited   (91,852)  $3.03    -   $- 
Expired   -   $-    -   $- 
Outstanding as of December 31, 2022   1,399,252   $2.40    7.79   $928 
Exercisable as of December 31, 2022   662,909   $1.79    5.87   $823 
Vested and expected to vest as of December 31, 2022   1,399,252   $2.40    7.79   $928 

 

As of December 31, 2022, there was $0.7 million of unrecognized stock-based compensation expense related to options granted but not yet amortized, which will be recognized over a weighted-average period of approximately 3.14 years.

 

The following table summarizes the outstanding and exercisable options as of December 31, 2022:

 

 

     Options Outstanding     Options Exercisable  
Range of
Exercise Prices		     Number of
Shares		     Weighted
Average
Remaining
Contractual Life		     Number of
Shares		     Weighted
Average
Remaining
Contractual Life		  
$ 0.00 - $ 1.00       459,080       4.51       456,179       4.49  
$ 1.01 - $ 2.00       130,510       9.91       4,909       9.91  
$ 2.01 - $ 3.00       459,786       9.65       41,850       9.09  
$ 3.01 - $ 4.00       110,530       9.19       48,066       9.19  
$ 5.01 - $ 6.00       66,924       8.75       54,530       8.75  
$ 6.01 - $ 7.00       170,069       8.75       56,689       8.75  
$ 8.01 - $ 9.00       2,353       8.86       686       8.86  
Total       1,399,252       7.79       662,909       5.87  

 

 

 

For the years ended December 31, 2022, and 2021, the Company utilized the Black-Scholes option-pricing model for estimating the fair value of the stock option granted. The Company estimated the fair value of each option grant on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

 

    Years Ended December 31, 
   2022    2021 
Expected volatility   100.48% – 103.20 %   41.66% – 82.12 %
Expected term (years)   5.27 – 10.00    5.00 – 6.33 
Risk-free interest rate   1.93% – 4.05 %   0.62% – 1.36 %
Dividend rate   –%   –%

 

During the years ended December 31, 2022, and 2021, the Company recognized $644,000 and $147,000, respectively, in stock-based compensation expense from stock option grants and restricted stock awards. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the statements of operations and comprehensive loss for stock-based compensation arrangements.

 

The following table summarizes the components of stock-based compensation expense recognized in the Company’s statements of operations and comprehensive loss during the years ended December 31, 2022, and 2021 (in thousands):

 

   2022   2021 
   Years Ended December 31, 
   2022   2021 
Research and development  $134   $26 
General and administrative   510    121 
Total stock-based compensation expense  $644   $147 

 

In January 2022, the Company granted 3,500 shares of restricted common stock under the 2021 Plan to a consultant as partial consideration for services rendered, with a deemed fair value of $04.03 per share or $14,000. The fair value of this restricted stock award was expensed as stock-based compensation on the date of grant as they were fully vested on that date.

 

Common Stock Warrants

 

In connection with the IPO, the Company issued warrants to purchase 3,035,195 shares of the Company’s common stock. Warrants to purchase 198,875 shares of the Company’s common stock expire on August 25, 2026, and warrants to purchase 2,588,120 shares of the Company’s common stock expire on August 31, 2026.

 

The following is a summary of the common stock warrant activity during the year ended December 31, 2022:

 

   Shares Issuable Upon Exercise of Outstanding Warrants  

Weighted-

Average Exercise

Price

   Weighted- Average Remaining Contractual Life (in years)  

Aggregate

Intrinsic Value

(in thousands)

 
Outstanding as of December 31, 2021   2,786,995   $10.80    4.67   $30,100 
Issued   -    -    -    - 
Exercised   -    -    -    - 
Expired   -    -    -    - 
Outstanding as of December 31, 2022   2,786,995   $10.80    3.67   $30,100