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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2023
Stock-Based Compensation [Abstract] |
Stock-Based Compensation |
15) | Stock-Based Compensation
Equity Incentive Plans The Company’s stock-based compensation plans consist of the Restated 2020 Equity Incentive Plan (the “Restated 2020 Plan”) and the 2021 Inducement Equity Incentive Plan (the “2021 Inducement Plan”). The Company’s board of directors has designated its compensation committee as the administrator of the foregoing plans (the “Plan Administrator”). Among other things, the Plan Administrator selects persons to receive awards under the foregoing plans and determines the number of shares subject to each award and the terms, conditions, performance measures, if any, and other provisions of the award. The Restated 2020 Plan provides for (a) approximately 724,000 shares of common stock that can be issued under the Restated 2020 Plan, which includes an increase to the Restated 2020 Plan of 300,000 that was approved by the Company’s stockholders at the 2023 annual meeting of stockholders on June 16, 2023, and (b) an annual increase in the number of shares reserved for issuance on January 1 of each year from 2022 through 2031 equal to the lesser of (i) 5% of the number of shares of common stock outstanding on the immediately preceding December 31 and (ii) such smaller number of shares of common stock as may be determine by the board of directors (the provision providing for the increase described in clause (b) is referred to as the “evergreen provision”). As of January 1, 2023, pursuant to the evergreen provision, the number of shares issuable under the Restated 2020 Plan was increased by approximately 256,000. Based on the number of shares of common stock outstanding on December 31, 2023, as of January 1, 2024, pursuant to the evergreen provision, the number of shares issuable under the Restated 2020 Plan was increased by approximately 271,000. Awards under the Restated 2020 Plan may be granted to officers, directors, employees and consultants of the Company. Stock options granted under the Restated 2020 Plan may either be incentive stock options or nonqualified stock options, may have a term of up to ten years, and are exercisable at a price per share not less than the fair market value, as defined in the Restated 2020 Plan, on the date of grant. As of December 31, 2023, there was approximately 684,000 shares of common stock remaining to be issued under the Restated 2020 Plan. As of December 31, 2023, there were approximately 296,000 stock options outstanding under the Restated 2020 Plan and no RSUs granted under the Restated 2020 Plan were outstanding. The 2021 Inducement Plan provides for the grant of up to 75,000 share-based awards as material inducement awards to new employees in accordance with the employment inducement grant rules set forth in Section 711(a) of the NYSE American LLC Company Guide (the Company’s common stock was listed on the NYSE American at the time the 2021 Inducement Plan was adopted). The 2021 Inducement Plan expires in May 2031. As of December 31, 2023, there was approximately 68,000 shares of common stock remaining to be issued under the 2021 Inducement Plan. As of December 31, 2022, there were approximately 4,000 stock options outstanding and approximately 1,000 RSUs outstanding that were granted under the 2021 Inducement Plan. Equity Awards Stock Options The Company records stock-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The fair value of stock options granted is recognized as expense over the requisite service period on a straight-lined basis. The risk-free rate is based on the observed interest rates appropriate for the expected life. The expected life (estimated period of time outstanding) of the stock options granted is estimated using the “simplified” method as permitted by the SEC’s Staff Accounting Bulletin No. 110, Share-Based Payment. Expected volatility is based on the volatility of the Company’s peer group over the expected life of the stock option granted, and the Company assumes no dividends. Forfeitures are recognized as incurred. The following weighted-average assumptions were used for stock options granted during the years ended December 31, 2023 and 2022:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |
Weighted average risk-free rate |  |  | 3.82 | % |  |  | 2.52 | %
Weighted average volatility |  |  | 95.15 | % |  |  | 90.49 | %
Dividend yield |  |  | 0 | % |  |  | 0 | %
Expected term |  | 5.44 years |  |  | 5.79 years |
The following table summarizes stock option activity for the years ended December 31, 2023 and 2022 (in thousands except for per-share and remaining contractual life data):
|  | Outstanding Options |  |  | Weighted Average Exercise Price per Share |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Aggregate Intrinsic Value |
Outstanding January 1, 2022 |  |  | 199 |  |  | $ | 168 |  |  |  | 9.38 |  |  | $ | - |
Granted |  |  | 287 |  |  |  | 17 |  |  |  |  |  |  |  |  |
Cancelled |  |  | (127 | ) |  |  | 141 |  |  |  |  |  |  |  |  |
Outstanding December 31, 2022 |  |  | 359 |  |  |  | 57 |  |  |  | 7.57 |  |  |  | - |
Granted |  |  | 237 |  |  |  | 4 |  |  |  |  |  |  |  |  |
Cancelled |  |  | (207 | ) |  |  | 19 |  |  |  |  |  |  |  |  |
Outstanding December 31, 2023 |  |  | 389 |  |  | $ | 45 |  |  |  | 7.04 |  |  | $ | - |
Options vested and exercisable at December 31, 2023 |  |  | 331 |  |  | $ | 50 |  |  |  | 6.69 |  |  | $ | - |
The per-share weighted average grant-date fair value of stock options granted during the year ended December 31, 2022 and 2021 was $2.99 and $12.91, respectively. As of December 31, 2023, the unamortized stock-based compensation expense related to outstanding unvested options was approximately $0.6 million with a weighted average remaining requisite service period of 1.91 years. The Company expects to amortize this expense over the remaining requisite service period of these stock options. Vesting of all stock options is subject to continuous service with the Company through their applicable vesting dates. During the year ended December 31, 2022, the Company accelerated the vesting of approximately 40,000 stock options under certain time-based vesting stock option grants previously awarded to Dr. Howard Federoff, the Company’s former chief executive officer, pursuant to a separation agreement entered into with Dr. Federoff. The Company also waived a performance condition under a performance-based stock option grant and accelerated the vesting of approximately 21,000 stock options under such grant. Lastly, the Company extended the post-termination exercise period from 90 days to 36 months immediately following his separation date for any options that were vested, including the options that accelerating in vesting, as described above. The above modifications to Dr. Federoff’s stock options grants resulted in modification accounting under ASC 718, Compensation – Stock Compensation. As a result, the Company immediately recognized approximately $0.1 million during 2022 for the incremental fair value of stock options that were vested prior to the modification by calculating the difference between the fair value of the modified award and the fair value of the original award immediately before it was modified. For stock options that were not vested prior to the modification but then vested as a result of the acceleration, the Company reversed any stock compensation expense previously recognized, remeasured the fair value of the modified award and immediately recognized approximately $0.1 million during 2022 of stock compensation expense in full since there was no future service period required to be provided. Restricted Stock Units The following table summarizes RSU activity for the years ended December 31, 2023 and 2022 (in thousands except for per-share data):
|  | Outstanding Restricted Stock Units |  |  | Weighted Average Fair Value per Share |
January 1, 2022 |  |  | 12 |  |  | $ | 276 |
Granted |  |  | 55 |  |  |  | 39 |
Released |  |  | (3 | ) |  |  | 271 |
Cancelled |  |  | (60 | ) |  |  | 61 |
December 31, 2022 |  |  | 4 |  |  |  | 236 |
Cancelled |  |  | (3 | ) |  |  | 199 |
December 31, 2023 |  |  | 1 |  |  | $ | 322 |
Balance expected to vest at December 31, 2023 |  |  | 1 |  |  | $ | 322 |
The Company recognizes the fair value of RSUs granted as expense on a straight-line basis over the requisite service period. For performance based RSUs, the Company begins recognizing the expense once the achievement of the related performance goal is determined to be probable. Outstanding RSUs are settled in an equal number of shares of common stock on the vesting date of the award. An RSU award is settled only to the extent vested. Vesting generally requires the continued employment or service by the award recipient through the respective vesting date. Because RSUs are settled in an equal number of shares of common stock without any offsetting payment by the recipient, the measurement of cost is based on the quoted market price of the stock at the measurement date, which is the grant date. In lieu of paying cash to satisfy withholding taxes due upon the settlement of vested RSUs, at the Company’s discretion, an employee may elect to have shares of common stock withheld that would otherwise be issued at settlement, the value of which is equal to the amount of withholding taxes payable. During the year ended December 31, 2023, less than 1,000 RSUs vested. During the year ended December 31, 2022, approximately 3,000 RSUs vested. The Company withheld approximately 1,000 RSUs to cover withholding taxes, and the net 2,000 shares were issued upon settlement. Stock-Based Compensation Expense For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense as follows (in thousands):
|  | Years ended December 31, |
|  | 2023 |  |  | 2022 |
Research and development |  | $ | 234 |  |  | $ | 1,249 |
General and administrative |  |  | 1,008 |  |  |  | 1,686 |
Total |  | $ | 1,242 |  |  | $ | 2,935 |

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