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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Note 12. Stock-Based Compensation The Company has long-term compensation plans that permit the granting of equity-based awards in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, other stock awards, and performance awards. At the 2018 Annual Stockholders Meeting of the Company held on May 15, 2018, stockholders approved the 2018 Stock Incentive Plan (the “2018 Plan”). The 2018 Plan, as adopted, permits the granting of 180,000 shares of common stock as equity awards in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, other stock awards, performance awards, or in any combination of the foregoing. At the 2019 Annual Stockholders Meeting of the Company held on May 14, 2019, stockholders approved an amendment to the 2018 Plan whereby the Company increased the number of common stock shares available by 80,000 to a total of 260,000 under the 2018 Plan, as amended. At the 2020 Annual Stockholders Meeting of the Company held on June 15, 2020, stockholders approved an amendment to the 2018 Plan, as previously amended, whereby the Company increased the number of shares of common stock available by 166,667 to a total of 426,667 under the 2018 Plan, as amended. At the 2021 Annual Stockholders Meeting of the Company held on June 10, 2021, stockholders approved an amendment to the 2018 Plan, as previously amended, whereby the Company increased the number of shares of common stock available by 513,333 to a total of 940,000 under the 2018 Plan, as amended. At the 2023 Annual Stockholders Meeting of the Company held on June 14, 2023, stockholders approved an amendment to the 2018 Plan, as previously amended, whereby the Company increased the number of shares of common stock available by 1,030,000 to a total of 1,970,000 under the 2018 Plan, as amended. Prior to the adoption of the 2018 Plan, the Company had maintained the 2007 Stock Incentive Plan (the “2007 Plan”). The Company has issued stock awards to employees and directors in the form of stock options and restricted stock. Options are generally granted with strike prices equal to the fair market value of a share of common stock on the date of grant. Incentive stock options may be granted to purchase shares of common stock at a price not less than 100% of the fair market value of the underlying shares on the date of grant, provided that the exercise price of any incentive stock option granted to an eligible employee owning more than 10% of the outstanding stock of the Company must be at least 110% of such fair market value on the date of grant. Only officers and key employees may receive incentive stock options. Option and restricted stock awards vest upon terms determined by the Compensation Committee of the Board of Directors and are subject to accelerated vesting in the event of a change of control or certain terminations of employment. The Company issues new shares to satisfy its obligations from the exercise of options or the grant of restricted stock awards. On July 19, 2022, September 27, 2022, December 13, 2022, March 17, 2023 and June 26, 2023, the Compensation Committee of the Board of Directors approved the grant of (i) inducement stock options (the “Inducement Option Grants”) to purchase a total of 177,000 shares, 8,501 shares, 19,000 shares, 5,230 shares and 5,000 shares of common stock, respectively, and (ii) inducement restricted stock awards (the “Inducement Stock Grants”) totaling 63,000 shares, 2,250 shares, 4,000 shares, 1,100 shares and 1,000 shares of common stock, respectively, to eleven employees. Each Inducement Option Grant has an exercise price per share equal to $1.95, $1.65, $1.40, $1.32, and $1.28 which represents the closing price of the Company’s common stock as reported by Nasdaq on July 19, 2022, September 27, 2022, December 13, 2022, March 17, 2023, and June 26, 2023, respectively. Each Inducement Option Grant vests over three to four years, with one-third or one-fourth vesting on the one-year anniversary of the employee’s first day of employment with the Company and one-third or one-fourth vesting on the second thru fourth anniversaries thereafter, subject to the new employee’s continued service relationship with the Company on each such date. Each Inducement Option Grant has a ten-year term and is subject to the terms and conditions of the applicable stock option agreement. Each of Inducement Stock Grant vested on the one-year anniversary of the employee’s first day of employment with the Company is subject to the new employee’s continued service relationship with the Company through such date and is subject to the terms and conditions of the applicable restricted stock agreement. As of September 30, 2023, there were a total of 214,751 shares of the Company’s common stock subject to outstanding inducement awards. As of September 30, 2023, there were a total of 1,975,073 shares of the Company’s common stock reserved for issuance under the 2018 Plan, which were comprised of 802,363 shares of the Company’s common stock subject to equity awards previously granted under the 2018 Plan and 2007 Plan and 1,172,710 shares of the Company’s common stock available for future issuance under the 2018 Plan. A summary of stock option awards and restricted stock grants, inclusive of awards granted under the 2018 Stock Plan and Inducement Option Grants for the nine months ended September 30, 2023 is presented below. Summary of Stock Options Awards and Restricted Stock Grants
|  | Stock Options |  |  | Restricted Stock Awards |  |  | Weighted Average |
|  | Options Outstanding |  |  | Weighted Average Exercise Price |  |  | Non-vested Restricted Stock Outstanding |  |  | Weighted Average Grant Date Fair Value |  |  | Contractual Terms of Equity Awards (in years) |
Equity awards outstanding at January 1, 2023 |  |  | 760,220 |  |  | $ | 4.55 |  |  |  | 69,650 |  |  | $ | 1.92 |  |  |  |  |
Equity awards granted |  |  | 335,000 |  |  | $ | 1.32 |  |  |  | 2,100 |  |  | $ | 1.30 |  |  |  |  |
Equity awards vested and issued |  |  | - |  |  |  | - |  |  |  | (53,200 | ) |  |  | 1.96 |  |  |  |  |
Equity awards terminated |  |  | (125,672 | ) |  | $ | 8.99 |  |  |  | (200 | ) |  | $ | 4.60 |  |  |  |  |
Equity awards outstanding at September 30, 2023 |  |  | 969,548 |  |  | $ | 2.86 |  |  |  | 18,350 |  |  | $ | 1.70 |  |  |  | 8.9 |
Aggregate intrinsic value of outstanding equity awards at September 30, 2023 |  | $ | - |  |  |  |  |  |  | $ | - |  |  |  |  |  |  |  |  |
Equity awards exercisable at September 30, 2023 |  |  | 400,879 |  |  | $ | 4.03 |  |  |  |  |  |  |  |  |  |  |  | 8.7 |
Aggregate intrinsic value of equity awards exercisable at September 30, 2023 |  | $ | - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total compensation cost related to stock options and restricted stock awards amounted to approximately $0.6 million and $2.0 million for the nine-month periods ended September 30, 2023 and 2022, respectively. Of these amounts, $0.2 million and $0.7 million were charged to research and development during the nine-month periods ended September 30, 2023 and 2022, respectively, and $0.4 million and $1.3 million were charged to general and administrative expenses during the nine-month periods ended September 30, 2023 and 2022, respectively. As of September 30, 2023, there was $0.4 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements. That cost is expected to be recognized over a period of 3 to 4 years. The weighted average grant date fair values of the stock options granted were $2.03 and $4.16 during the nine-month periods ended September 30, 2023 and 2022, respectively. The fair values of stock options granted were estimated at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model was originally developed for use in estimating the fair value of traded options, which have different characteristics from the Company’s stock options. The model is also sensitive to changes in assumptions, which can materially affect the fair value estimate. The Company used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model: Schedule of Assumptions Used to Determine Fair Value of Options Granted
|  | For the Nine Months Ended September 30, |
|  | 2023 |  |  | 2022 |
Risk-free interest rate |  |  | 3.72 | % |  |  | 1.74 to 4.14 | %
Expected volatility |  |  | 107.03 to 113.64 | % |  |  | 107.6 to 113.95 | %
Expected life (in years) |  |  | 9.0 to 10.0 |  |  |  | 7.5 to 9.0 |
Expected dividend yield |  |  | - | % |  |  | - | %
Expected volatilities utilized in the model are based on historical volatility of the Company’s stock price. The risk-free interest rate is derived from values assigned to U.S. Treasury bonds with terms that approximate the expected option lives in effect at the time of grant.

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