Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

v3.21.2
STOCK-BASED COMPENSATION
9 Months Ended
Sep. 30, 2021
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 6 – STOCK-BASED COMPENSATION

 

Stock Options: The following table summarizes stock option-based compensation for the three and nine months ended September 30, 2021 and 2020:

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2021     2020     2021     2020  
Research and development   $ 432,000     $ 765,000     $ 1,649,000     $ 2,380,000  
General and administrative     955,000       484,000       2,148,000       1,703,000  
Stock option-based compensation expense included in operating expense   $ 1,387,000     $ 1,249,000     $ 3,797,000     $ 4,083,000  

 

We estimate the fair value of each option award on the date of grant using the Black-Scholes option valuation model. We then recognize the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over the service period (generally the vesting period). The Black-Scholes model incorporates the following assumptions:

 

  Expected volatility - we estimate the volatility of our share price at the date of grant using a “look-back” period which coincides with the expected term, defined below. We believe using a “look-back” period which coincides with the expected term is the most appropriate measure for determining expected volatility.
  Expected term - we estimate the expected term using the “simplified” method, as outlined in Staff Accounting Bulletin No. 107, “Share-Based Payment.”
  Risk-free interest rate - we estimate the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.
  Dividends - we use an expected dividend yield of zero because we have not declared or paid a cash dividend, nor do we have any plans to declare a dividend.

 

We used the following weighted-average assumptions to estimate the fair value of the options granted for the periods indicated:

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2021     2020     2021     2020  
Expected volatility     92 %     110 %     97 %     111 %
Expected term     6.08 years       6.25 years       5.97 years       6.25 years  
Risk-free interest rate     0.97 %     0.16 %     0.98 %     0.29 %
Expected dividend yield     0 %     0 %     0 %     0 %

 

The following table summarizes the options granted for the periods indicated:

 

    2021     2020     2021     2020  
    For the three months ended September 30,     For the nine months ended September 30,  
    2021     2020     2021     2020  
Options granted     1,028,000       342,100       4,383,308       3,415,146  
Weighted-average:                                
Exercise price   $ 1.25     $ 3.08     $ 1.86     $ 2.38  
Grant date fair value   $ 0.94     $ 2.56     $ 1.44     $ 1.99  

 

Restricted Common Stock: The following table summarizes restricted common stock compensation expense for the three and nine months ended September 30, 2021 and 2020:

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2021     2020     2021     2020  
Research and development   $ 256,000     $ 89,000     $ 1,286,000     $ 561,000  
General and administrative     894,000       72,000       1,832,000       251,000  
Restricted stock-based compensation expense included in operating expense   $ 1,150,000     $ 161,000     $ 3,118,000     $ 812,000  

 

 

The following table summarizes the restricted common stock granted for the periods indicated:

 

    2021     2020     2021     2020  
    For the three months ended September 30,     For the nine months ended September 30,  
    2021     2020     2021     2020  
Restricted common stock granted     767,934       -       2,743,668       1,083,313  
Restricted common stock forfeited     (293,109 )     (265,080 )     (721,768 )     (265,080 )
Weighted-average:                                
Grant date fair value-granted awards   $ 1.24     $ -     $ 1.77     $ 3.19  
Grant date fair value-forfeited awards   $ 1.93     $ 3.18     $ 1.90     $ 3.18