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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

11. Stock-Based Compensation

 

The Company sponsors the Pulmatrix, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan”). As of September 30, 2022, the 2013 Plan provides for the grant of up to 454,363 shares of common stock, of which 142,642 shares remain available for future grant.

 

In addition, the Company sponsors two legacy plans under which no additional awards may be granted. As of September 30, 2022, the two legacy plans have a total of 35 options outstanding, all of which are fully vested.

 

 

During the nine months ended September 30, 2022, the Company granted 123,357 options to employees and directors with a weighted-average grant date fair value of $5.45 per share.

 

The following table summarizes stock option activity for the nine months ended September 30, 2022:

  

   Number of Options  Weighted-Average Exercise Price 

Weighted-

Average Remaining

Contractual Term (Years)

  Aggregate Intrinsic Value
Outstanding — January 1, 2022   196,006   $52.72    8.12   $-   
Granted   123,357    6.45           
Forfeited or expired   (11,445)   200.12           
Outstanding — September 30, 2022   307,918   $28.70    8.22   $-   
Exercisable — September 30, 2022   136,308   $46.42    7.42   $-   

 

The Company records stock-based compensation related to stock options based on their grant date fair value. During the nine months ended September 30, 2022, the Company used the Black-Scholes option-pricing model to estimate the fair value of stock option grants and to determine the related compensation expense. The assumptions used in estimating the fair value of stock-based payment awards represent management’s best estimates. The weighted-average assumptions used in determining fair value of the stock options for the nine months ended September 30, 2022 and 2021, are as follows:

Schedule of Calculation of Fair Value Assumptions 

  

Nine Months Ended

September 30,

   2022  2021
Expected option life (years)   6.03    5.98 
Risk-free interest rate   2.03%   0.62%
Expected volatility   113.28%   104.96%
Expected dividend yield   -%   -%

 

The expected life of the Company’s options was determined using the simplified method as a result of limited historical data regarding the Company’s activity. The risk-free interest rate was obtained from U.S. Treasury rates for the expected life of the stock options. The Company’s expected volatility was based upon the Company’s own historical volatility. The dividend yield considers that the Company has not historically paid dividends and does not expect to pay dividends in the foreseeable future.

 

As of September 30, 2022, there was $1.9 million of unrecognized stock-based compensation expense related to unvested stock options granted under the Company’s stock award plans. This expense is expected to be recognized over a weighted-average period of approximately 2.19 years.

 

The following table presents total stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021, respectively (dollars in thousands):

 

   2022  2021  2022  2021
  

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

   2022  2021  2022  2021
Research and development  $65   $53   $189   $164 
General and administrative   212    231    646    747 
Total stock-based compensation expense  $277   $284   $835   $911