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Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

9. Stock-Based Compensation

Equity Incentive Plans

In September 2012, the Company adopted the 2012 Equity Incentive Plan, as amended, which provides designated employees of the Company and its affiliates, certain consultants and advisors who perform services for the Company and its affiliates, and nonemployee members of the Board of Directors of the Company and its affiliates with the opportunity to receive grants of incentive stock options, nonqualified stock options and stock awards.

On January 20, 2017, the Company’s stockholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). Beginning on January 1, 2018, the number of shares of common stock authorized for issuance pursuant to the 2016 Plan was increased each January 1 by an amount equal to four percent (4%) of the Company’s outstanding common stock as of the end of the immediately preceding calendar year or such other amount as determined by the compensation committee of the Company’s board of directors. During the year ended December 31, 2019, the compensation committee of the board of directors authorized an additional 3,000,000 shares of common stock to be added to the shares authorized for issuance under the 2016 Plan.

9. Stock-Based Compensation (continued)

As of December 31, 2021, there were 409,896 shares available for grant under the Company’s Equity Incentive Plans.

A summary of stock option activity under the Company’s Equity Incentive Plans is as follows:


		Weighted
		Average		Weighted	Aggregate
		Exercise Price		Average Remaining	Intrinsic
	Options	Per Share		Life in Years	Value
Outstanding at December 31, 2019	4,024,566	$	7.48	7.98	$	2
Granted	2,662,500	$	2.10
Exercised	(32,778)	$	1.53
Forfeited	(260,435)	$	6.95
Outstanding at December 31, 2020	6,393,853	$	5.29	7.96	$	1,961
Granted	2,482,650	$	2.19
Exercised	(2,292)	$	1.55
Forfeited	(348,593)	$	3.17
Outstanding at December 31, 2021	8,525,618	$	4.48	7.58	$	7,673
Options exercisable at December 31, 2021	5,421,641	$	5.83	6.89	$	4,074
Options vested and expected to vest at December 31, 2021	8,525,618	$	4.48	7.58	$	7,673

The grant date fair value of the options granted during the years ended December 31, 2021 and 2020 was estimated at the date of grant using the Black-Scholes option valuation model. The expected life was estimated using the “simplified” method as defined by the SEC’s Staff Accounting Bulletin 107, Share-Based Payment. The expected volatility was based on the historical volatility of comparable public companies from a representative peer group selected based on industry and market capitalization data. The risk-free interest rate was based on the continuous rates provided by the U.S. Treasury with a term approximating the expected life of the option. The expected dividend yield was 0% because the Company does not expect to pay any dividends for the foreseeable future. The Company elected the straight-line attribution method in recognizing the grant date fair value of options issued over the requisite service periods of the awards, which are generally the vesting periods.

The weighted average grant date fair value for the stock options granted during the years ended December 31, 2021 and 2020 was $1.37 and $1.33 per share, respectively.

The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and directors during the years ended December 31, 2021 and 2020 were as follows, presented on a weighted average basis:


	Year Ended December 31,
	2021		2020
Expected volatility	67.64	%	66.94	%
Weighted average risk-free interest rate	0.82	%	0.66	%
Expected dividend yield	0.00	%	0.00	%
Expected term (in years)	6.82		6.85

9. Stock-Based Compensation (continued)

Stock options generally vest over a three or four year period, as determined by the compensation committee of the board of directors at the time of grant. The options expire ten years from the grant date. As of December 31, 2021, there was approximately $3,921 of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average period of approximately 1.93 years.

Restricted Stock Units

During the year ended December 31, 2020, the Company issued 92,500 restricted stock units (“RSUs”) to employees under the 2016 Plan. Upon vesting of the RSUs, the Company had the option to settle the award by either issuing shares of the Company’s common stock or paying an amount of cash equal to the fair value of the Company’s common stock on the settlement date. In January 2021, the Company cash settled 92,500 RSUs. As of December 31, 2020, these RSUs were classified as restricted stock liability in the consolidated balance sheets of $204, as they contained a cash settlement option.

During the years ended December 31, 2021 and 2020, the Company granted 275,000 and 660,606, respectively, RSUs to executive officers that will cliff vest and will be settled after three years of continuous service, or upon a change of control of the Company, whichever is earlier, pursuant to the 2016 Plan. During the years ended December 31, 2021 and 2020, the Company recognized $530 and $248, respectively, of stock based compensation expense related to these equity classified RSUs, as they do not contain a cash settlement option.

The following table presents RSU activity under the 2016 Plan as of December 31, 2021:


		Weighted
	Number of	Average
	Shares	Fair Value
Outstanding at December 31, 2019	90,500	$	1.76
Awarded	753,106	$	1.49
Settled in cash	(90,500)	$	1.76
Outstanding at December 31, 2020	753,106	$	1.52
Awarded	275,000	$	2.57
Settled in cash	(92,500)	$	1.97
Outstanding at December 31, 2021	935,606	$	1.76

As of December 31, 2021, there were 935,606 shares outstanding covered by RSUs that were vested and expected to vest with a weighted average grant date fair value of $1.76 per share and an aggregate grant date fair value of $1,645. As of December 31, 2021, there was approximately $865 of unrecognized compensation costs related to RSUs granted to employees, which are expected to be recognized as expense over a remaining weighted average period of 1.69 years.

The Company recognized stock-based compensation expense related to the issuance of stock option awards and RSUs to employees and non-employees in the consolidated statements of operations during the years ended December 31, 2021 and 2020 as follows:

9. Stock-Based Compensation (continued)

Stock Based Compensation Expense


	Year Ended
	December 31,
	2021		2020
Research and development	$	1,641	$	1,172
General and administrative		2,045		1,604
Total	$	3,686	$	2,776