| Stock-Based Compensation |
NOTE 5 – STOCK-BASED COMPENSATION
The following table summarizes stock option-based
compensation for the three months ended March 31, 2020 and 2019:
| |
|
For the three months ended March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| Research and development |
|
$ |
744,000 |
|
|
$ |
1,032,000 |
|
| General and administrative |
|
|
512,000 |
|
|
|
1,071,000 |
|
| Stock option-based compensation expense included in operating expense |
|
|
1,256,000 |
|
|
|
2,103,000 |
|
| |
|
|
|
|
|
|
|
|
| Total stock option-based compensation expense |
|
|
1,256,000 |
|
|
|
2,103,000 |
|
| Tax benefit |
|
|
- |
|
|
|
- |
|
| Stock option-based compensation expense, net of tax |
|
$ |
1,256,000 |
|
|
$ |
2,103,000 |
|
Stock Options: 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 March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| Expected volatility |
|
|
111 |
% |
|
|
109 |
% |
| Expected term |
|
|
6.25 years |
|
|
|
5 years |
|
| Risk-free interest rate |
|
|
0.43 |
% |
|
|
2.46 |
% |
| Expected dividend yield |
|
|
0 |
% |
|
|
0 |
% |
The following table summarizes the options
granted for the periods indicated:
| |
|
For the three months ended March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| Options granted |
|
|
1,175,927 |
|
|
|
201,000 |
|
| Weighted-average: |
|
|
|
|
|
|
|
|
| Exercise price |
|
$ |
1.45 |
|
|
$ |
6.69 |
|
| Grant date fair value |
|
$ |
1.21 |
|
|
$ |
5.29 |
|
Restricted Common Stock: We did not
grant any shares of restricted common stock to employees during the three months ended March 31, 2020 or 2019. The following table
summarizes restricted common stock compensation expense for the three months ended March 31, 2020 and 2019:
| |
|
For the three months ended March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| Research and development |
|
$ |
325,000 |
|
|
$ |
- |
|
| General and administrative |
|
|
139,000 |
|
|
|
172,000 |
|
| Restricted stock-based compensation expense included in operating expense |
|
|
464,000 |
|
|
|
172,000 |
|
| |
|
|
|
|
|
|
|
|
| Total restricted stock-based compensation expense |
|
|
464,000 |
|
|
|
172,000 |
|
| Tax benefit |
|
|
- |
|
|
|
- |
|
| Restricted stock-based compensation expense, net of tax |
|
$ |
464,000 |
|
|
$ |
172,000 |
|
|