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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

NOTE 10: STOCK-BASED COMPENSATION

Stock Options

2022 Equity Incentive Awards

On February 17, 2022, pursuant to the Company’s 2020 Equity Incentive Plan, the compensation committee of the Company’s board of directors approved a total of 1,250,000 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers. Each option award was granted with an exercise price of $0.46 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date. Additionally, on February 17, 2022, the compensation committee of the Company’s board of directors approved a total of 395,000 options to purchase the Company’s common stock to non-executive employees of the Company as equity-based incentive awards. Each option award was granted with an exercise price of $0.46 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such employee’s continued service on the applicable vesting date.

The above awards were in addition to 175,000 stock option awards issued during the three months ended March 31, 2021 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $1.00 per share, the closing price of the Company's common stock on the Nasdaq Global Market on January 3, 2022, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.

A summary of the Company’s stock option activity for the three months ended March 31, 2022 is as follows:


						Weighted Average
						Remaining
		Weighted Average		Total Intrinsic		Contractual
	Number of Shares	Exercise Price		Value		Life (in years)
Outstanding as of January 1, 2022	7,686,233	$	5.47	$	—	7.7
Granted	1,820,000		0.51		—	9.8
Canceled/Expired	(117,082)		2.60		—	—
Outstanding as of March 31, 2022	9,389,151	$	4.54	$	—	7.9
Options vested and exercisable	4,798,325	$	6.48	$	—	7.1

The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans. The weighted average assumptions used in calculating the fair values of stock options that were granted during the three months ended March 31, 2022 was as follows:



	For the Three Months Ended
	March 31, 2022
Exercise price	$	0.51
Expected term (years)		6.0
Expected stock price volatility		84	%
Risk-free rate of interest		2	%
Expected dividend rate		0	%

The following table sets forth stock-based compensation expenses recorded during the respective periods:


	For the Three Months Ended
	March 31,
	2022		2021
Stock Compensation expenses:
Research and development	$	878,000	$	696,000
General and administrative		753,000		681,000
Total stock compensation expenses	$	1,631,000	$	1,377,000

As of March 31, 2022, the total stock-based compensation cost related to unvested awards not yet recognized was $7.6 million. The expected weighted average period compensation costs to be recognized was approximately 1.9 years. Future option grants will impact the compensation expense recognized.