Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.19.3
Stock-Based Compensation
9 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation

NOTE 7 – STOCK-BASED COMPENSATION

 

The following table summarizes option-based compensation expense for the three and nine months ended September 30, 2019 and 2018:

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2019     2018     2019     2018  
Research and development   $ 972,000     $ 1,012,000     $ 3,013,000     $ 2,756,000  
General and administrative     854,000       1,487,000       2,594,000       4,316,000  
Stock-based compensation expense included in operating expense     1,826,000       2,499,000       5,607,000       7,072,000  
                                 
Total stock-based compensation expense     1,826,000       2,499,000       5,607,000       7,072,000  
Tax benefit     -       -       -       -  
Stock-based compensation expense, net of tax   $ 1,826,000     $ 2,499,000     $ 5,607,000     $ 7,072,000  

 

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,  
    2019     2018     2019     2018  
Expected volatility     103 %     109 %     108 %     109 %
Expected term     6.25 years       5.00 years       5.09 years       5.00 years  
Risk-free interest rate     1.83 %     2.78 %     2.21 %     2.54 %
Expected dividend yield     0 %     0 %     0 %     0 %

 

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

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2019     2018     2019     2018  
Options granted     105,600       157,000       1,490,490       1,026,800  
Weighted-average:                                
Exercise price   $ 2.58     $ 14.45     $ 6.53     $ 14.38  
Grant date fair value   $ 2.09     $ 11.44     $ 5.14     $ 11.36  

 

The following table summarizes restricted common stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018:

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2019     2018     2019     2018  
Research and development   $ 66,000     $ -     $ 66,000     $ -  
General and administrative     32,000       172,000       282,000       516,000  
Stock-based compensation expense included in operating expense     98,000       172,000       348,000       516,000  
                                 
Total stock-based compensation expense     98,000       172,000       348,000       516,000  
Tax benefit     -       -       -       -  
Stock-based compensation expense, net of tax   $ 98,000     $ 172,000     $ 348,000     $ 516,000  

 

We granted 376,625 shares of restricted common stock to employees during the three and nine months ended September 30, 2019. We did not grant any restricted common stock to employees during the three and nine months ended September 30, 2018.