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SHARE-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The following table sets forth the amount of share-based compensation expense recognized by the Company by line item on its Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2022, 2021 and 2020 (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Research and development | $ | 1,985 |  |  | $ | 973 |  |  | $ | 350 |
General and administrative | 4,924 |  |  | 4,170 |  |  | 1,407 |
Total Share Based Compensation | $ | 6,909 |  |  | $ | 5,143 |  |  | $ | 1,757 |
2014 Stock Incentive Plan The Company's 2014 Stock Incentive Plan, as amended (the "2014 Plan"), was adopted by its board of directors in December 2013 and subsequently approved by its stockholders in January 2014. The 2014 Plan became effective immediately prior to the closing of the Company's IPO in February 2014 and provides for the grant of incentive and non-qualified stock options, restricted stock awards and restricted stock units, stock appreciation rights and other stock-based awards, with amounts and terms of grants determined by the Company's board of directors at the time of grant, to the Company's employees, officers, directors, consultants and advisors. At the Annual Meeting of the Company's stockholders in June 2019, the Company's stockholders approved an amendment to the 2014 Plan that (i) increased by 7.9 million the number of shares of common stock reserved for issuance under the 2014 Plan and (ii) eliminated the “evergreen” or automatic replenishment provision of the 2014 Plan, pursuant to which the number of shares of common stock authorized for issuance under the 2014 Plan was automatically increased on an annual basis. At the Annual Meeting of the Company’s stockholders in May 2021, the Company’s stockholders approved an amendment to the 2014 Plan that increased by 12 million the number of shares of common stock reserved for issuance under the 2014 Plan. There were approximately 4.5 million shares of common stock available for issuance under the 2014 Plan as of December 31, 2022. Stock options outstanding under the 2014 Plan generally vest over a four-year period at the rate of 25% of the grant vesting on the first anniversary of the date of grant and 6.25% of the grant vesting at the end of each successive three-month period thereafter. Stock options granted under the 2014 Plan are exercisable for a period of ten years from the date of grant. There were approximately 12.2 million stock options outstanding under the 2014 Plan as of December 31, 2022. On September 9, 2021, the Board of Directors and the Compensation Committee of the Company approved a retention program for all current employees, except for the Chief Executive Officer, pursuant to which the Company will provide certain incentives designed to retain such employees (the “Retention Program”). Pursuant to the Retention Program and effective as of October 1, 2021, the Company’s non-executive employees received a combination of a cash bonus award and a one-time restricted stock unit (“RSU”) award which vested in full on September 30, 2022, subject to continued employment through September 30, 2022. Each RSU represents a contingent right to receive one share of the Company’s common stock. The Company recorded an expense of $2.5 million for retention-related RSUs for the year ended December 31, 2022. Also pursuant to the Retention Program and effective as of October 1, 2021, the Company’s executive officers, except for the Chief Executive Officer, were granted a one-time performance-based restricted stock unit (“PSU”) award equal to the value of approximately fifty percent of current base salary. Each PSU represents a contingent right to receive one share of the Company’s common stock upon the satisfaction of pre-determined performance criteria. Subject to continued employment, such awards vest on September 30, 2023 upon the determination by the Compensation Committee of the level of achievement of certain key milestones consisting of a clinical trial milestone, an employee retention milestone and cash management milestones. As of December 31, 2022, achievement was deemed probable for only the cash management milestone, representing $87,000 (or 20% of the PSU awards). Therefore, $55,000 was expensed during the year ended December 31, 2022, and $32,000 remains measured but unrecognized. A summary of the status of restricted stock units is presented below:
| Restricted Stock Units (in thousands)
Unvested at December 31, 2021 | 3,041 |
Granted RSU | 4,160 |
Granted PSU | 1,004 |
Vested | (3,293) |
Canceled or forfeited | (217) |
Unvested at December 31, 2022 | 4,695 |
The weighted average remaining contractual life of unvested RSUs and PSUs as of December 31, 2022 is 2.67 years. The weighted average remaining contractual life of unvested RSUs and PSUs as of December 31, 2021 is 9.75 years. 2009 Stock Incentive Plan The Company maintains a 2009 Stock Incentive Plan, as amended and restated (the "2009 Plan"), which provided for the grant of incentive and non-qualified stock options and restricted stock awards and restricted stock units, with amounts and terms of grants determined by the Company's board of directors at the time of grant, to its employees, officers, directors, consultants and advisors. Upon the closing of its IPO in February 2014, the Company ceased granting awards under the 2009 Plan and all shares (i) available for issuance under the 2009 Plan at such time and (ii) subject to outstanding awards under the 2009 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased without having been fully exercised or resulting in any common stock being issued were carried over to the 2014 Plan. Stock options granted under the 2009 Plan are exercisable for a period of ten years from the date of grant. There were approximately 0.1 million fully vested stock options outstanding under the 2009 Plan as of December 31, 2022. Out-of-Plan Inducement Grants From time to time, the Company has granted equity awards to its newly hired employees, including executives, in accordance with the Nasdaq Stock Market LLC ("Nasdaq") employment inducement grant exemption (Nasdaq Listing Rule 5635(c)(4)). Such grants are made outside of the 2014 Plan and act as an inducement material to the employee's acceptance of employment with the Company. T here were approximately 2.9 million stock options outstanding which were granted as employment inducement awards outside of the 2014 Plan as of December 31, 2022. Stock Options The following table sets forth a summary of the Company’s total stock option activity, including awards granted under the 2014 Plan and 2009 Plan and inducement grants made outside of stockholder approved plans, for the years ended December 31, 2022, 2021 and 2020:
| Number of Shares under Option (in thousands) |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Life (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2019 | 6,236 |  |  | $1.52 |  | 8.83 |  | $ | 358 |
Granted | 4,044 |  |  | $0.87 |  |  |  |
Exercised | (12) |  |  | $1.13 |  |  |  |
Canceled or forfeited | (121) |  |  | $1.04 |  |  |  |
Outstanding at December 31, 2020 | 10,147 |  |  | $1.26 |  | 8.50 |  | $ | 3,160 |
Granted | 8,273 |  |  | $3.32 |  |  |  |
Exercised | (34) |  |  | $1.23 |  |  |  |
Canceled or forfeited | (2,683) |  |  | $3.70 |  |  |  |
Outstanding at December 31, 2021 | 15,703 |  |  | $1.93 |  | 8.03 |  | $ | 82 |
Granted | 1,510 |  |  | $0.72 |  |  |  |
Exercised | (2) |  |  | $0.32 |  |  |  |
Canceled or forfeited | (1,907) |  |  | $1.90 |  |  |  |
Outstanding at December 31, 2022 | 15,304 |  |  | $1.82 |  | 7.19 |  | $ | 3 |
Exercisable at December 31, 2022 | 10,427 |  |  | $1.72 |  | 6.77 |  | DM
The Company recognized share-based compensation expense of $6.9 million, $5.1 million, and $1.8 million for the years ended December 31, 2022, 2021, and 2020, respectively. The stock option related expenses were $4.3 million, $4.6 million and $1.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. The RSU related expense was $2.5 million and $0.5 million for the years ended December 31, 2022 and 2021, respectively. The Company did not record RSU related expenses for the year ended December 31, 2020. As of December 31, 2022, there was $5.5 million of total unrecognized compensation cost related to non-vested stock options which the Company expects to recognize over a weighted-average period of 1.88 years. The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2022, 2021 and 2020 were $0.46, $2.16 and $0.56, respectively. The total intrinsic value of stock options exercised for the years ended December 31, 2022, 2021 and 2020 was de minimis. For the years ended December 31, 2022, 2021 and 2020, the grant-date fair value of stock options was determined using the following weighted-average inputs and assumptions in the Black-Scholes option pricing model:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Fair market value | $0.72 |  | $3.32 |  | $0.87
Grant exercise price | $0.72 |  | $3.32 |  | $0.87
Expected term (in years) | 6.0 |  | 6.0 |  | 6.1
Risk-free interest rate | 2.1% |  | 0.9% |  | 1.3%
Expected volatility | 71.8% |  | 74.6% |  | 71.5%
Dividend yield | —% |  | —% |  | —%

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