STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2020

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 12: STOCK-BASED COMPENSATION

Stock Options

Award of 2019 Performance Bonuses and 2020 Equity Incentive Awards

On March 10, 2020, upon the recommendation of the compensation committee and pursuant to the Company’s 2014 Omnibus Stock Ownership Plan, the Company’s board of directors approved a total of 1,170,000 options to purchase the Company’s common stock as (i) performance bonuses for 2019 performance and (ii) equity-based incentive awards to the Company’s executive officers. Each option award was granted with an exercise price of $2.12 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on March 10, 2020, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date.  Additionally, on March 10, 2020, the Company issued 111,000 options to purchase the Company’s common stock to other employees of the Company as equity-based incentive awards.  Each option award was granted with an exercise price of $2.12 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on March 10, 2020, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date.

The above awards were in addition to stock option awards issued during the nine months ended September 30, 2020 to new employees upon their commencement of employment with the Company.

A summary of the Company’s stock option activity is as follows:

				Weighted Average
				Remaining
		Weighted Average		Contractual Life (in
	Number of Shares	Exercise Price		years)	Intrinsic Value
Outstanding as of January 1, 2020	4,983,314	$	7.79	8.9	$	18,000
Granted	1,411,000		2.13	9.4		—
Canceled	(512,500)		9.13	—		—
Outstanding as of September 30, 2020	5,881,814	$	6.31	8.5	$	—
Options vested and exercisable	2,196,946	$	7.41	8.1	$	—

The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans. The weighted average assumptions used in calculating the fair values of stock options that were granted during the nine months ended September 30, 2020 was as follows:  

	For the Nine Months Ended
	September 30, 2020
Exercise price	$	2.13
Expected term (years)		6.0
Expected stock price volatility		109	%
Risk-free rate of interest		1	%
Expected dividend rate		0	%

The following table sets forth stock-based compensation expenses recorded during the respective periods:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Stock Compensation expenses:
Research and development	$	636,000	$	553,000	$	1,945,000	$	1,844,000
General and administrative		634,000		631,000		2,030,000		2,230,000
Total stock compensation expenses	$	1,270,000	$	1,184,000	$	3,975,000	$	4,074,000

At September 30, 2020, the total stock-based compensation cost related to unvested awards not yet recognized was $11.7 million. The expected weighted average period compensation costs to be recognized was approximately 2.5 years. Future option grants will impact the compensation expense recognized.