Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

v3.20.2
STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 6 – STOCK-BASED COMPENSATION

 

The following table summarizes stock option-based compensation for the three and six months ended June 30, 2020 and 2019:

 

SCHEDULE OF STOCK BASED COMPENSATION 

    For the three
months ended
June 30,		     For the three
months ended
June 30,		     For the six
months ended
June 30,		     For the six
months ended
June 30,		  
    2020     2019     2020     2019  
Research and development   $ 871,000     $ 1,009,000     $ 1,615,000     $ 2,041,000  
General and administrative     707,000       669,000       1,219,000       1,740,000  
Stock option-based compensation expense included in operating expense     1,578,000       1,678,000       2,834,000       3,781,000  
                                 
Total stock option-based compensation expense     1,578,000       1,678,000       2,834,000       3,781,000  
Tax benefit     -       -       -       -  
Stock option-based compensation expense, net of tax   $ 1,578,000     $ 1,678,000     $ 2,834,000     $ 3,781,000  

  

 

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
June 30,		     For the three
months ended
June 30,		     For the six
months ended
June 30,		     For the six
months ended
June 30,		  
    2020     2019     2020     2019  
Expected volatility     111%     108%     111%     108%
Expected term     6.25 years       5 years       6.25 years       5 years  
Risk-free interest rate     0.23%     2.21%     0.30%     2.24%
Expected dividend yield     0%     0%     0%     0%

 

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

 

 

    For the three
months ended
June 30,		     For the three
months ended
June 30,		     For the six
months ended
June 30,		     For the six
months ended
June 30,		  
    2020     2019     2020     2019  
Options granted     1,897,119       1,183,890       3,073,046       1,384,890  
Weighted-average:                                
Exercise price   $ 2.83     $ 6.86     $ 2.30     $ 6.84  
Grant date fair value   $ 2.36     $ 5.39     $ 1.92     $ 5.37  

 

Restricted Common Stock: We granted 1,083,313 shares of restricted common stock during the three and six months ended June 30, 2020. We did not grant any shares of restricted common stock to employees during the three and six months ended June 30, 2019. The following table summarizes restricted common stock compensation expense for the three and six months ended June 30, 2020 and 2019:

 

 

    For the three
months ended
June 30,		     For the three
months ended
June 30,		     For the six
months ended
June 30,		     For the six
months ended
June 30,		  
    2020     2019     2020     2019  
Research and development   $ 147,000     $ -     $ 472,000     $ -  
General and administrative     40,000       78,000       179,000       250,000  
Restricted stock-based compensation expense included in operating expense     187,000       78,000       651,000       250,000  
                                 
Total restricted stock-based compensation expense     187,000       78,000       651,000       250,000  
Tax benefit     -       -       -       -  
Restricted stock-based compensation expense, net of tax   $ 187,000     $ 78,000     $ 651,000     $ 250,000