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Stock Plans
 9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Stock Plans

 

2.Stock Plans

 

The following table summarizes option activity:

 

                    
           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
       Exercise   Option   Intrinsic 
   Options (in   Price per   Term   Value 
   thousands)   share   (in years)   (in thousands) 
Outstanding at December 31, 2021   682   $12.53    8.98   $— 
Granted   310    1.18           
Forfeited or expired   (53)   18.01           
Outstanding at September 30, 2022   939   $8.48    8.57   $— 
Exercisable at September 30, 2022   939   $8.48    8.57   $— 

 

On August 2, 2022, our Board of Directors, or Board, modified the outstanding options to purchase common stock under our 2015 Omnibus Equity Incentive Plan, or 2015 Plan, to allow for the acceleration of vesting of all unvested 2015 Plan options in the event of a change in control through the election of a majority of new members to our Board.

 

On August 15, 2022, the Special Meeting was held at the request of Activist, to increase the size of our Board from five members to eleven members and elect Activist’s slate of six nominees to serve as directors in addition to the existing five Board members. As a result of the change of control, all unvested options granted under the 2015 Plan prior to August 15, 2022, immediately became vested. We recognized approximately $0.5 million of stock-based compensation during the three months ended September 30, 2022.

 

During the three-month period ended September 30, 2022, our Board granted 125,000 options to purchase common stock at $1.52 per share and 900,000 options to purchase common stock at $1.31 per share which are subject to shareholder approval of an amendment to increase the number of shares reserved for issuance under our 2015 Plan. The options vest monthly over a 12-month period from the grant dates. As the shares underlying these options have not been approved by our stockholders, they have been excluded from the table above as of September 30, 2022.

 

The following table summarizes the stock-based compensation expense recorded for awards under our stock option plans (in thousands):

 

                    
   Three Months Ended   Nine Months Ended 
(in thousands)  September 30,   September 30, 
   2022   2021   2022   2021 
Research and development  $306   $325   $553   $659 
Selling, general and administrative   217    330    414    691 
Total stock-based compensation  $523   $655   $967   $1,350 

 

We use the Black-Scholes-Merton option-pricing model with the following assumptions to estimate the fair value of our stock options:

 

                     
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Weighted-average risk-free interest rate   —%   —%   1.91%   0.5%
Expected dividend payments   —    —    —    — 
Expected holding period (years) 1   —    —    5.3    5.5 
Weighted-average volatility factor 2   —    —    1.16    1.14 
Estimated forfeiture rates for options granted 3   —%   —%   5.6%   30%

 

 

(1) Expected holding period is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and the expectations of future employee behavior.
(2) Weighted average volatility is based on the historical volatility of our common stock.
(3) Estimated forfeiture rates are based on historical data.

 

As of September 30, 2022, there was approximately $1.1 million of total unrecognized compensation expense related to non-vested stock options subject to shareholder approval. This expense is expected to be recognized over a weighted-average period of approximately 1.0 year.