XML 23 R11.htm IDEA: XBRL DOCUMENT
v3.19.1

Stock-Based Compensation | 3 Months Ended
--- | ---
Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-based Compensation | STOCK-BASED COMPENSATION The 2015 Employee, Director and Consultant Equity Incentive Plan Prior to the Cerulean/Private Daré stock purchase transaction, the 2015 Employee, Director and Consultant Equity Incentive Plan of Private Daré, or the 2015 Private Daré Plan, governed the issuance of equity awards to Private Daré employees, officers, non-employee directors and consultants. Options granted under the 2015 Private Daré Plan have terms of ten years from the date of grant unless earlier terminated and generally vest over a three-year period. Upon closing of the Cerulean/Private Daré stock purchase transaction, the Company assumed the 2015 Private Daré Plan and each outstanding option to acquire Private Daré stock that was not exercised prior to the closing. Options to purchase 50,000 shares of Private Daré stock were assumed. Such options were assumed on the same terms as were applicable to them under the 2015 Private Daré Plan and became an option to purchase such number of shares of the Company’s common stock equal to the number of Private Daré shares subject to such option multiplied by the exchange ratio specified in the Daré Stock Purchase Agreement, at a correspondingly adjusted exercise price. Based on the exchange ratio and after giving effect to the reverse stock split effected in connection with the closing of the Cerulean/Private Daré stock purchase transaction, such options were replaced with options to purchase 10,149 shares of the Company’s common stock, all of which were outstanding as of March 31, 2019. Private Daré issued 900,000 and 200,000 shares of fully vested restricted stock to non-employees under the 2015 Private Daré Plan during 2015 and 2016, respectively. In connection with the closing of the Cerulean/Private Daré stock purchase transaction, the Company assumed these shares and replaced them with 223,295 restricted shares of the Company’s common stock (after giving effect to the reverse stock split effected in connection with the closing of the Cerulean/Private Daré stock purchase transaction). No further awards may be granted under the 2015 Private Daré Plan following the closing of the Cerulean/Private Daré stock purchase transaction. 2014 Employee Stock Purchase Plan In March 2014, the Company’s board of directors adopted, and its stockholders approved the 2014 Employee Stock Purchase Plan, or the ESPP, which became effective in April 2014. The ESPP permits eligible employees to enroll in a six-month offering period whereby participants may purchase shares of the Company’s common stock, through payroll deductions, at a price equal to 85% of the closing price of the common stock on the first day of the offering period or on the last day of the offering period, whichever is lower. Purchase dates under the ESPP occur on or about June 30 and December 31 each year. The Company’s board of directors decided not to initiate a new offering period beginning January 1, 2017 and no offering period has been initiated since then. There was no stock-based compensation related to the ESPP for the three months ended March 31, 2019 or March 31, 2018. Amended and Restated 2014 Stock Incentive Plan The Company maintains the Amended and Restated 2014 Plan, or the Amended 2014 Plan, which was approved by the Company’s stockholders on July 10, 2018. The Amended 2014 Plan was an amendment and restatement of the Company’s 2014 Stock Incentive Plan, or the 2014 Plan. When adopted, there were 2,046,885 shares of common stock authorized for issuance under the Amended 2014 Plan. The number of authorized shares increases annually on the first day of each fiscal year until, and including, the fiscal year ending December 31, 2024 by the least of (i) 2,000,000, (ii) 4% of the number of outstanding shares of common stock on such date, or (iii) an amount determined by the Company’s board of directors. On January 1, 2019, the number of authorized shares increased by 456,886 to 2,503,771, which increase represented 4% of the number of outstanding shares of common stock on such date. In March 2017, the Company’s board of directors approved two modifications to outstanding stock options granted under the 2014 Plan to participants providing services to the Company as of that date. One modification extended the exercise period of such stock options to two years after such participant’s termination date, unless the exercise period absent such modification would be longer. The other modification provided for accelerated vesting of such stock options upon a change in control event. These modifications resulted in unamortized fair value expense of approximately $3.7 million and was recorded as part of the total consideration in the Cerulean/Private Daré stock purchase transaction (see Note 4). The two modifications resulted in certain options remaining outstanding that would have otherwise expired. At March 31, 2019, 323,560 shares of common stock were reserved for future issuance under the Amended 2014 Plan, and options to purchase 2,190,360 shares of the Company’s common stock granted under the Amended 2014 Plan were outstanding. Summary of Stock Option Activity The table below summarizes stock option activity under the Amended 2014 Plan, and related information for the three months ended March 31, 2019. The exercise price of all options granted during the three months ended March 31, 2019 was equal to the market value of the Company’s common stock on the date of the grant. As of March 31, 2019, unamortized stock-based compensation expense of $1,343,624 will be amortized over a weighted average period of 3.3 years.
| Number of Shares |  | Weighted Average Exercise Price
Outstanding at December 31, 2018 (1) | 1,635,790 |  |  | $ | 11.08 |
Granted | 563,000 |  |  | 0.76 |
Exercised | — |  |  | — |
Canceled/forfeited | (8,360 | ) |  | 17.81 |
Expired | (70 | ) |  | 59.48 |
Outstanding at March 31, 2019 (unaudited) (1) | 2,190,360 |  |  | $ | 8.40 |
Exercisable at March 31, 2019 (unaudited) | 650,151 |  |  | $ | 25.97 |
(1)Includes 10,149 shares subject to options granted under the 2015 Private Daré Plan assumed in connection with the Cerulean/Private Daré stock purchase transaction. Compensation Expense Total stock-based compensation expense related to stock options granted to employees and directors recognized in the consolidated statement of operations is as follows:
| Three Months Ended March 31,
| 2019 |  | 2018
Research and development | $ | 24,703 |  |  | $ | — |
General and administrative | 73,265 |  |  | 9,124 |
Total | $ | 97,968 |  |  | $ | 9,124 |
The assumptions used in the Black-Scholes option-pricing model for stock options granted to employees and to directors in respect of board services during the three months ended March 31, 2019 are as follows:
|  | Three Months Ended March 31, 2019
Expected life in years |  | 10.0
Risk-free interest rate |  | 2.70%
Expected volatility |  | 120%
Forfeiture rate |  | 0.0%
Dividend yield |  | 0.0%
Weighted-average fair value of options granted |  | $0.72
Restricted Stock After the Cerulean/Private Daré Stock Purchase Transaction The 3.14 million shares of common stock issued in connection with the Cerulean/Private Daré stock purchase transaction to the Private Daré stockholders were not registered with the SEC and may only be sold if registered under the Securities Act of 1933, as amended, or pursuant to an exemption from the registration requirements thereunder. The shares held by non-affiliates became eligible for sale under Rule 144 beginning six months after the closing of the Cerulean/Private Daré stock purchase transaction.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + 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