XML 39 R24.htm IDEA: XBRL DOCUMENT v3.25.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [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 in June 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”). Pursuant to the evergreen provision, shares issuable under the Restated 2020 Plan was increased by approximately 527,000 in the aggregate.

 

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, 2024, there were approximately 855,000 stock options outstanding and no RSUs outstanding under the Restated 2020 Plan. As of December 31, 2024, there were approximately 380,000 shares of common stock remaining to be issued under the Restated 2020 Plan.

 

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, 2024, there were approximately 71,000 shares of common stock remaining to be issued under the 2021 Inducement Plan. As of December 31, 2023, there were no stock options outstanding and less than 1,000 RSUs outstanding under the 2021 Inducement Plan.

 

Equity Awards

 

Stock Options

 

The following weighted-average assumptions were used for stock options granted during the years ended December 31, 2024 and 2023:

 

      2023 
   Year ended December 31, 
   2024   2023 
Weighted average risk-free rate   4.44%   3.82%
Weighted average volatility   98.09%   95.15%
Dividend yield   0%   0%
Expected term   6.04 years    5.44 years 

 

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 table summarizes stock option activity for the years ended December 31, 2024 and 2023 (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, 2023   359   $57    7.57   $- 
Granted   237    4           
Cancelled   (207)   19           
Outstanding December 31, 2023   389    45    7.04    - 
Granted   2,488    2           
Cancelled   (248)   8           
Outstanding December 31, 2024   2,629   $8    8.77   $- 
                     
Options vested and exercisable at December 31, 2024   257   $61    5.58   $- 

 

The per-share weighted average grant-date fair value of stock options granted during the year ended December 31, 2024 and 2023 was $1.39 and $2.99, respectively.

 

As of December 31, 2024, the unamortized stock-based compensation expense related to outstanding unvested options was approximately $2.3 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.

 

On January 1, 2024, Sanjeev Luther was appointed as President, Chief Executive Officer and a director of the Company. Upon his appointment, he was granted a non-qualified stock option to purchase approximately 1,685,000 shares of the Company’s common stock. The stock option has an exercise price of $1.80 per share, which was equal to the fair market value (as defined in the 2020 Restated Equity Incentive Plan) of the Company’s common stock on the date of grant, will vest over four years, with 25% of the shares vesting on the first anniversary of the grant date and the remaining 75% of the shares vesting in equal monthly installments over the three years thereafter, in each case, subject to continued service. The stock option was granted pursuant to the terms of Mr. Luther’s employment agreement and as a material inducement to his joining the Company in accordance with Nasdaq Listing Rule 5635(c)(4).

 

On April 26, 2024, the vesting terms of Mr. Luther’s stock option award were amended so that the option vests over three years, with 25% of the shares vesting on the first anniversary of the grant date and the remaining 75% of the shares will vest in equal monthly installments over the remaining two years, in each case, subject to continued service.

 

Since the only modification to Mr. Luther’s stock option award was to the vesting terms, there was no change to the fair value of the stock option and the total compensation cost was unchanged. However, the total compensation cost will be recognized over three years rather than four years, and as a result, the Company recognized approximately $0.1 million in additional stock-based compensation expense during the year ended December 31, 2024 as a result of the modification.

 

 

Restricted Stock Units

 

The following table summarizes RSU activity for the years ended December 31, 2024 and 2023 (in thousands except for per-share data):

 

   Outstanding
Restricted
Stock Units		   Weighted
Average Fair
Value per Share		 
January 1, 2023   4   $236 
Cancelled   (3)   199 
December 31, 2023   1    322 
Cancelled   -   - 
December 31, 2024   1   $322 
           
Balance expected to vest at December 31, 2024   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 years ended December 31, 2024 and 2023, less than 1,000 RSUs vested in each year.

 

Stock-Based Compensation Expense

 

For the years ended December 31, 2024 and 2023, the Company recognized stock-based compensation expense as follows (in thousands):

 

   2024   2023 
   Years ended December 31, 
   2024   2023 
Research and development  $89   $234 
General and administrative   1,431    1,008 
Total  $1,520   $1,242