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STOCK-BASED COMPENSATION | 3 Months Ended
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Mar. 31, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2023 Equity Incentive Plan: The Company maintains the 2023 Equity Incentive Plan (the "2023 Plan") and previously maintained the 2019 Equity Incentive Plan (the “2019 Plan”) and 2018 Omnibus Incentive Plan (the "2018 Plan"). Following stockholder approval in December 2023, any shares then available for future grant under the 2019 Plan and 2018 Plan were allocated to the 2023 Plan. As of March 31, 2024, 120,168 shares remained issuable under the 2023 Plan, and no further grants will be made under the 2018 Plan or 2019 Plan. 2024 Inducement Plan: On February 28, 2024, the Board approved the Company's 2024 Inducement Plan (the "Inducement Plan"). Pursuant to the Inducement Plan and Nasdaq Listing Rule 5635(c)(4), the Company is permitted to grant equity awards as an inducement material to an individual's entering into employment with the Company, subject to certain conditions ("Inducement Grants"). As of March 31, 2024, there were 500,000 shares available for future Inducement Grants. 2019 Employee Share Purchase Plan: The Company has adopted an Employee Share Purchase Plan ("ESPP") pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85% of the lesser of the fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”). Employees are permitted to purchase the number of shares purchasable with up to 15% of the earnings paid (as such term is defined in the ESPP) to each of the participating employees during the Purchase Period, subject to certain limitations under Section 423 of the U.S. Internal Revenue Code. As of March 31, 2024, 101,202 shares remained available for grant under the ESPP. For both the three months ended March 31, 2024 and 2023, no shares were issued to employees pursuant to the ESPP. Options and Restricted Stock Units ("RSUs") granted to employees and directors: For the three months ended March 31, 2024, the Company granted options and RSUs to employees and directors as follows.
| Three Months Ended March 31, 2024
| Award amount |  | Exercise price range |  | Vesting period |  | Expiration
Options | 575,000 |  |  | $ | 2.33 |  |  | 1 year - 4 years |  | 10 years
RSUs | 435,000 |  |  | $ | — |  |  | 4 years |  | —
During the three months ended March 31, 2024, the fair value of options and RSUs granted to employees and directors was $2.1 million. There were no options or RSUs granted to employees and directors for the three months ended March 31, 2023. The fair value of RSUs granted is based on the share price on the grant date. One share of common stock will be issued upon settlement of each RSU that vests. The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on a combination of historical volatilities of companies in comparable stages as well as companies in the industry, by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted in dollar terms. The Company’s management uses the expected term of each option as its expected life. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. The underlying data used for computing the fair value of the options are as follows:
| Three Months Ended March 31,
| 2024
Fair value of common stock | $1.88 - $1.94
Dividend yield | 0 | %
Expected volatility | 104.63% - 105.71%
Risk-free interest rate | 3.95 | %
Expected term | 6 years
Stock-based compensation expenses: The following table illustrates the effect of stock-based compensation on the line items on the unaudited condensed consolidated statements of operations:
| Three Months Ended March 31, |  |
(in thousands) | 2024 |  | 2023 |  |  |  |
Research and development expenses | $ | 163 |  |  | $ | 44 |  |  |  |  |
General and administrative | 822 |  |  | 812 |  |  |  |  |
Total | $ | 985 |  |  | $ | 856 |  |  |  |  |

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