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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Stock-Based Compensation

Stock-Based Compensation

Note 14. Stock-Based Compensation

2018 Equity Incentive Plan

In September 2018, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2018 Equity Incentive Plan (the “2018 Plan”) which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants. Stock options granted under the 2018 Plan generally vest one-fourth on the first anniversary of the vesting commencement date with the balance vesting monthly over the remaining three years. Restricted stock units granted under the 2018 Plan generally vest one third on the first anniversary of the vesting commencement date and one sixth every six months thereafter such that the award will be fully vested on the third anniversary of the vesting commencement date. As of September 30, 2023 and December 31, 2022, 9,564 and 8,552 shares of common stock, respectively, were reserved for future issuance pursuant to the 2018 Plan. The number of shares available for issuance under the 2018 Plan also includes an annual increase on the first day of each fiscal year equal to the lesser of (1) 1,305 shares; (2) 5% of the outstanding shares of our common stock as of the last day of the immediately preceding fiscal year; or 3) such other amount as the Company’s board of directors may determine.

2020 Inducement Equity Incentive Plan

In March 2020, the Company adopted the 2020 Inducement Equity Incentive Plan (the “2020 Plan”) for the purpose of attracting, retaining and incentivizing employees in furtherance of the Company’s success. The 2020 Plan was adopted without stockholder approval pursuant to Rule 303A.08 of the New York Stock Exchange. The 2020 Plan is used to offer equity awards as material inducements for new employees to join the Company. Upon adoption of the 2020 Plan, 640 shares of common stock were reserved for the granting of inducement stock options, restricted stock awards, restricted stock units and other forms of equity awards. As of September 30, 2023 and December 31, 2022, 181 shares of common stock were reserved for future issuance under the 2020 Plan.

Stock Options Assumed in Merger (See Note 3, Business Combination)

At the closing of the Merger, each outstanding option to purchase Old Catheter common stock that had not previously been exercised prior to the closing of the Merger was assumed and converted into options to purchase 753,699 shares of the Company’s Common Stock (“Replacement Options”). Additionally, no Old Catheter options were amended in connection with the Merger. All the Replacement Options vested in accordance with the original terms of the grants in place at the time of the Merger. As a result, $3.4 million of purchase price consideration, which represented the estimated fair value of Old Catheter’s assumed stock options, and $1.1 million of stock-based compensation expense, which represents the excess of the estimated fair value of the Replacement Options over the assumed Old Catheter stock options, were recognized upon the closing of the Merger.

Stock Options

The following is a summary of stock option activity for the nine months ended September 30, 2023:

		Stock Options				Weighted Average Exercise Price				Weighted Average Remaining Life (in years)				Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022			990			$	11,405
Options assumed in Old Catheter Merger			753,699			$	1				-			$	-
Options exercised			(402,328	)		$	1				-			$	-
Canceled/forfeited			(137,709	)		$	75				-			$	-
Outstanding at September 30, 2023			214,652			$	6				6.6			$	-
Vested and expected to vest at September 30, 2023			214,652			$	6				6.6			$	-
Exercisable at September 30, 2023			214,652			$	6				6.6			$	-

The Company did not grant any stock options during the nine months ended September 30, 2023.

Restricted Stock Units

The following is a summary of the restricted stock unit activity for the 2018 Plan for the nine months ended September 30, 2023:

		Restricted Stock Units				Weighted Average Grant Date Fair Value
Outstanding at December 31, 2022			61			$	450
Vested			(26	)		$	333
Forfeited			(9	)		$	1,129
Outstanding at September 30, 2023			26			$	333

Restricted Stock Awards

A summary of the restricted stock award activity for the nine months ended September 30, 2023 is presented below:

		Restricted Stock Awards				Weighted Average Grant Date Fair Value
Outstanding at December 31, 2022			948			$	248
Vested			(503	)		$	306
Forfeited			(445	)		$	184
Outstanding at September 30, 2023			-			$	-

Employee Stock Purchase Plan

In September 2018, the Company’s board of directors adopted the 2018 Employee Stock Purchase Plan (the “ESPP”) which permitted eligible employees to purchase the Company’s common stock at a discount through payroll deductions during defined offering periods. Eligible employees could elect to withhold up to 15% of their base earnings to purchase shares of the Company’s common stock at a price equal to 85% of the fair market value on the first day of the offering period or the purchase date, whichever was lower. The number of shares of common stock reserved for issuance under the ESPP automatically increased on January 1 of each fiscal year by the lesser of (1) 237 shares, (2) 1.25% of the total number of shares outstanding on December 31 of the preceding fiscal year, or (3) such other amount as the Company’s board of directors may determine.

For the three and nine months ended September 30, 2023, there was no cash received from the exercise of purchase rights under the ESPP. For the three and nine months ended September 30, 2022, cash received from the exercise of purchase rights under the ESPP was approximately $5 thousand, respectively. The Company paused the ESPP in May 2022.

As of September 30, 2023, the Company had issued 950 shares of common stock since inception of the ESPP, and 26 shares were reserved for future issuance.

Stock-based compensation expense recorded in operating expenses was as follows:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Selling, general and administrative		$	2			$	85			$	1,222			$	302
Research and development			-				(11	)			-				57
Total Stock-based compensation		$	2			$	74			$	1,222			$	359

There was no stock-based compensation capitalized to property and equipment and inventory during the three and nine months ended September 30, 2023. Stock-based compensation of approximately $0 and $6 thousand was capitalized to inventory and property and equipment during the three and nine months ended September 30, 2022, respectively.

Total unrecognized estimated stock-based compensation expense by award type and the remaining weighted average recognition period over which such expense is expected to be recognized at September 30, 2023 was as follows:

		Unrecognized Expense (in thousands)				Remaining Weighted Average Recognition Period (in years)
Stock Options		$	-				-
Restricted stock awards		$	-				-
Restricted stock units		$	3				0.3

Adoption of 2023 Equity Incentive Plan

On July 11, 2023, the Company held an Annual Meeting where the Company stockholders approved the 2023 Equity Incentive Plan (“2023 Plan”) that authorizes the Company to grant options, restricted stock and other equity-based awards. No issuance of options have been granted under the 2023 Plan.