Stock-based awards include stock options and RSUs under the Company’s 2022 Equity Incentive Plan ("2022 Plan"), Amended and Restated 2012 Equity Incentive Plan (“2012 Plan”), inducement awards, performance-based RSUs under an Incentive Award Performance-Based Restricted Stock Unit Agreement, the Company’s 2021 Inducement Equity Incentive Plan (“Inducement Plan”), and rights to purchase stock under the ESPP. The Company calculates the grant date fair value of all stock-based awards in determining the stock-based compensation expense.

Stock-based compensation expense for all stock-based awards consists of the following (in thousands):


	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Research and development	$	117	$	111	$	363	$	267
General and administrative	$	427	$	477	$	1,514	$	1,162
Total	$	544	$	588	$	1,877	$	1,429

The total unrecognized compensation cost related to unvested stock option grants as of December 31, 2022 was approximately $2.9 million and the weighted average period over which these grants are expected to vest is 2.16 years.

The total unrecognized compensation cost related to unvested RSUs (not including performance-based RSUs) as of December 31, 2022 was approximately $0.3 million, which will be recognized over a weighted average period of 1.41 years.

The Company uses either the Black-Scholes or Monte Carlo option-pricing models to calculate the fair value of stock options, depending on the complexity of the equity grants. Stock-based compensation expense is recognized over the vesting period using the straight-line method. The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses the Company-specific historical volatility rate as the indicator of expected volatility. The risk-free interest rate assumption is based on U.S. Treasury rates. The weighted average expected life of options was estimated using the average of the contractual term and the weighted average vesting term of the options. The measurement and classification of share-based payments to non-employees is consistent with the measurement and classification of share-based payments to employees. The fair value of stock options was estimated at the grant date using the following weighted average assumptions:


	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	December 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021
Dividend yield		—			—			—			—
Volatility		95.93	%		95.42	%		95.43	%		95.96	%
Risk-free interest rate		3.97	%		1.20	%		3.21	%		1.19	%
Expected life of options	6.00 years			5.69 years			6.00 years			5.70 years
Weighted average grant date fair value	$	1.23		$	5.20		$	1.96		$	5.23

The fair value of each RSU and performance-based RSU is recognized as stock-based compensation expense over the vesting term of the award. The fair value is based on the closing stock price on the date of the grant.

The Company uses the Black-Scholes valuation model to calculate the fair value of shares issued pursuant to the ESPP. Stock-based compensation expense is recognized over the purchase period using the straight-line method. The fair value of ESPP shares was estimated at the purchase period commencement date using the following assumptions:


	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	December 31, 2022			December 31, 2021*			December 31, 2022			December 31, 2021*
Dividend yield		—			—			—			—
Volatility		0.00	%		0.00	%		86.58	%		0.00	%
Risk-free interest rate		0.00	%		0.00	%		3.34	%		0.00	%
Expected term		—			—		6 months				—
Grant date fair value	$	—		$	—		$	0.82		$	—

*There were no participants in the ESPP for the purchase periods beginning March 1, 2021 or September 1, 2021.

The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses the Company-specific historical volatility rate as the indicator of expected volatility. The risk-free interest rate assumption is based on U.S. Treasury rates. The expected life is the 6-month purchase period. There was one participant in the ESPP for the current purchase period (beginning September 1, 2022).

The Company is authorized to issue 25,000,000 shares of preferred stock. There are no shares of preferred stock currently outstanding, and the Company has no current plans to issue shares of preferred stock.

In March 2021, the Company's Board of Directors ("Board") approved the Inducement Plan. The Inducement Plan authorized the issuance of up to 750,000 shares of common stock for awards of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, performance shares, and other stock or cash awards.

On October 12, 2022, the Company's stockholders and the Board approved the 2022 Plan, and it became effective on that date. The 2022 Plan replaced the 2012 Plan on the effective date. Upon the effective date, the Company ceased granting awards under the 2012 Plan and any shares remaining available for future issuance under the 2012 Plan were cancelled and are no longer available for future issuance. The 2012 Plan continues to govern awards previously granted under it. At the time the Board approved the 2022 Plan, an aggregate of 1,363,000 shares of the Company’s common stock was initially reserved for issuance under the 2022 Plan. The Company committed to reducing the new 2022 Plan share reserve by the number of shares that were granted under the 2012 Plan and the Inducement Plan between July 25, 2022 and October 12, 2022. From July 25, 2022 to October 12, 2022, the Company issued 126,262 shares of its common stock under the 2012 Plan. As a result, the number of shares reserved for future issuance under the 2022 Plan is 1,236,738 shares of common stock. The Company also committed to reducing the aggregate number of shares of its common stock issuable pursuant to the Inducement Plan from 750,000 shares to 51,000 shares (which includes 50,000 shares of its common stock issuable pursuant to an outstanding option to purchase common stock with an exercise price of $2.75 per share, leaving only 1,000 shares available for future issuance under the Inducement Plan) and the share reserve was reduced effective October 12, 2022.

The Company previously had an effective shelf registration statement on Form S-3 (File No. 333-222929) and the related prospectus previously declared effective by the SEC on February 22, 2018 (the “2018 Shelf”), which registered $100.0 million of common stock, preferred stock, warrants and units, or any combination of the foregoing, that was set to expire on February 22, 2021. On January 19, 2021, the Company filed a shelf registration statement on Form S-3 (File No. 333-252224) to register $150.0 million of the Company’s common stock, preferred stock, debt securities, warrants and units, or any combination of the foregoing (the “2021 Shelf”) and a related prospectus. The 2021 Shelf was declared effective by the SEC on January 29, 2021 and replaced the 2018 Shelf at that time.

On March 16, 2018, the Company entered into a Sales Agreement (“Sales Agreement”) with H.C. Wainwright & Co., LLC and Jones Trading Institutional Services LLC (each an “Agent” and together, the “Agents”). On January 29, 2021, the Company filed a prospectus supplement to the 2021 Shelf (the “ATM Prospectus Supplement”), pursuant to which the Company may offer and sell, from time to time through the Agents, shares of its common stock in ATM sales transactions having an aggregate offering price of up to $50.0 million. Any shares offered and sold will be issued pursuant to the 2021 Shelf. During the three and nine months ended December 31, 2022, the Company issued zero shares of common stock in ATM offerings under the ATM Prospectus Supplement. As of December 31, 2022, the Company has sold an aggregate of 1,580,862 shares of common stock in ATM offerings under the ATM Prospectus Supplement, with gross proceeds of approximately $21.7 million. As of December 31, 2022, there was approximately $100.0 million available for future offerings under the 2021 Shelf (excluding amounts available but not yet issued under the ATM Prospectus Supplement), and approximately $28.3 million available for future offerings through the Company’s ATM program under the ATM Prospectus Supplement.


	Number of Shares			Weighted Average Price
Unvested at March 31, 2022		15,500		$	10.58
Granted		117,642		$	1.53
Vested		(4,084	)	$	11.06
Cancelled / forfeited		—		$	—
Unvested at December 31, 2022		129,058		$	2.32

During the three and nine months ended December 31, 2022, under both the 2022 Plan and 2012 Plan, 9,553 and 209,474 stock options were granted at various exercise prices, respectively.

On October 7, 2021, the Company granted 30,000 and 7,500 stock options, respectively, to its Executive Chairman and its Chief Scientific Officer under the 2012 Plan. These stock options have unique vesting criteria based on specific Company performance conditions. The vesting criteria relates to the Company closing a seven-figure cash up front deal with a major pharmaceutical company. As of December 31, 2022, management estimated there was a 0% probability of achievement, and therefore no expense has been recorded to date.

The following table summarizes the Company’s stock option activity from March 31, 2022 to December 31, 2022:


	Options Outstanding			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at March 31, 2022		1,203,671		$	7.36	$	71,650
Options granted		209,474		$	2.51	$	—
Options cancelled / forfeited		(6,092	)	$	5.38	$	—
Options exercised		—		$	—	$	—
Outstanding at December 31, 2022		1,407,053		$	6.65	$	—
Vested and Exercisable at December 31, 2022		487,477		$	7.28	$	—

The weighted average remaining contractual term of stock options exercisable and outstanding at December 31, 2022 was approximately 8.17 years.

In June 2016, the Board adopted, and in August 2016, the Company’s stockholders subsequently approved, the ESPP. The Company reserved 75,000 shares of common stock for issuance thereunder. The ESPP permits employees after five months of service to purchase common stock through payroll deductions, limited to 15 percent of each employee’s compensation up to $25,000 per employee per year or 500 shares per employee per six-month purchase period. Shares under the ESPP are purchased at 85 percent of the fair market value at the lower of (i) the closing price on the first trading day of the six-month purchase period or (ii) the closing price on the last trading day of the six-month purchase period. The initial offering period commenced in September 2016. At December 31, 2022, there were 59,435 shares available for purchase under the ESPP.

Common stock reserved for future issuance consisted of the following at December 31, 2022:


Common stock issuable pursuant to options outstanding and reserved under the 2012 Plan			1,347,500
Common stock reserved under the 2012 Plan			—
Common stock issuable pursuant to options outstanding and reserved under the 2022 Plan			9,553
Common stock reserved under the 2022 Plan			1,115,635
Common stock reserved under the ESPP			59,435
Common stock reserved under the 2021 Inducement Equity Plan			1,000
Common stock issuable pursuant to restricted stock units outstanding under the 2012 Plan			11,416
Common stock issuable pursuant to restricted stock units outstanding under the 2022 Plan			117,642
Common stock issuable pursuant to options outstanding and reserved under the Inducement Plan			50,000
Total at December 31, 2022			2,712,181