XML 31 R18.htm IDEA: XBRL DOCUMENT

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

11. Stock-Based Compensation

Stock based compensation has been reported within expense line items on the consolidated statement of operations for the years ended 2021 and 2022 as shown in the following table (in thousands):


	Year Ended
	December 31,
	2022		2021
General and administrative	$	1,051	$	819
Research and development		455		338
Stock-based compensation costs before income taxes	$	1,506	$	1,157

2018 Plan

In May 2018, the Company’s stockholders approved the 2018 Equity Incentive Plan (the “2018 Plan”), under which Cyclacel may make equity incentive grants to its officers, employees, directors and consultants. The 2018 Plan replaced the 2015 Equity Incentive Plan (the “2015 Plan”).

The 2018 Plan allows for various types of award grants, including stock options and restricted stock units.

On June 14, 2022, the Company’s stockholders approved an increase of 500,000 shares of common stock to be reserved for issuance under the 2018 Plan. As of December 31, 2022, the Company has 392,396 shares of the Company’s common stock reserved and available for issuance under the 2018 Plan, including shares that were available under the 2015 Plan and carried forward to the 2018 Plan. Stock option awards granted under the Company’s equity incentive plans have a maximum life of 10 years and generally vest over a one to four-year period from the date of grant.

2020 Inducement Equity Incentive Plan

In October 2020, the Inducement Equity Incentive Plan (the “Inducement Plan”), became effective. Under the Inducement Plan, Cyclacel may make equity incentive grants to new senior level Employees (persons to whom the Company may issue securities without stockholder approval). The Inducement Plan allows for the issuance of up to 200,000 shares of the Company’s common stock (or the equivalent of such number). As of December 31, 2022, 120,000 shares under the Inducement Plan have been issued, leaving a remaining reserve of 80,000 shares.

Option Grants and Exercises

There were 552,153 options granted during the year ended December 31, 2021, all issued under the 2018 Plan. There were 522,337 options granted during the year ended December 31, 2022, all issued under the 2018 Plan.

The weighted average grant-date fair values of options granted during the years ended December 31, 2021 and 2022 were $3.36 and $1.76, respectively.

As of December 31, 2022, the total remaining unrecognized compensation cost related to the unvested stock options with service conditions amounted to approximately $2.0 million, which will be amortized over the weighted-average remaining requisite service period of 1.4 years.

During the years ended December 31, 2021 and 2022, the Company did not settle any equity instruments with cash.

There were 6,600 stock option exercises during the year ended 2021. There were no stock option exercises during the year ended 2022. No income tax benefits were recorded for the years ended December 31, 2021 and 2022. The Company does not expect to be able to benefit from the deduction for stock option exercises that may occur because the Company has tax loss carryforwards from prior periods that would be expected to offset any potential taxable income.

Outstanding Options

A summary of the share option activity and related information is as follows:


				Weighted
		Weighted		Average
	Number of	Average		Remaining	Aggregate
	Options	Exercise		Contractual	Intrinsic
	Outstanding	Price Per Share		Term (Years)	Value ($000)
Options outstanding at December 31, 2020	602,683	$	11.01	9.39	$	1,861
Granted	552,153	$	4.26	—		—
Exercised	(6,600)	$	3.35	—		—
Cancelled/forfeited	(48,879)	$	14.18	—		—
Options outstanding at December 31, 2021	1,099,357	$	7.53	8.99	$	189
Granted	522,337	$	2.41	—		—
Cancelled/forfeited	(11,104)	$	10.49
Options outstanding at December 31, 2022	1,610,590	$	5.85	8.34	$	—
Unvested at December 31, 2022	872,957	$	3.09	8.92	$	—
Vested and exercisable at December 31, 2022	737,633	$	9.11	7.67	$	—

The fair value of the stock options granted is calculated using the Black-Scholes option-pricing model as prescribed by ASC 718 using the following assumptions:



	Year ended	Year ended
	December 31, 2022	December 31, 2021
Expected term (years)	5 – 6	5 – 6
Risk free interest rate	1.370% – 3.605%	0.420% – 1.290%
Volatility	86% – 93%	95% – 102%
Expected dividend yield over expected term	0.00%	0.00%
Resulting weighted average grant date fair value	$1.76	$3.36

Restricted Stock Units

The Company issued 18,992 restricted stock units to employees during the year ended December 31, 2021. These restricted stock units will vest over a period of one or three years. Each restricted stock unit was valued at $6.69 based on their fair value at the date of grant, which is equivalent to the market price of a share of the Company’s common stock.

The Company issued an additional 118,665 restricted stock units during the year ended December 31, 2022. These restricted stock units will vest over a period of one year for awards granted to directors and three years for grants to employees. Each restricted stock unit was valued at $1.11 based on their fair value at the date of grant, which is equivalent to the market price of a share of the Company’s common stock. Summarized information for restricted stock units as of December 31, 2022 is as follows:


		Weighted
		Average
	Restricted	Grant Date
	Stock Units	Value Per Share
Restricted Stock Units outstanding at December 31, 2020	16,524	$	11.30
Granted	18,992		6.69
Cancelled/forfeited	(16,524)		15.20
Restricted Stock Units outstanding at December 31, 2021	18,992	$	6.69
Granted	118,665		1.11
Restricted Stock Units outstanding at December 31, 2022	137,657	$	1.88

Unvested at December 31, 2022	120,248	$	1.18
Vested and exercisable at December 31, 2022	17,409	$	6.69