Stock Plans and Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock Plans and Stock-Based Compensation

As of December 31, 2021, the Company had two shareholder-approved, stock-based compensation plans: (i) the Amended and Restated 2010 Employee Stock Purchase Plan, (“ESPP”), adopted by the Board of Directors in April 2017 and approved by shareholders in June 2017, and (ii) the Fourth Amended and Restated 2010 Stock Incentive Plan (“2010 Plan”). New employees are typically issued options as an inducement equity award under Nasdaq Listing Rule 5635(c)(4) outside of the 2010 Plan.

The Fourth Amended and Restated 2010 Stock Incentive Plan

The 2010 Plan permits the granting of incentive and non-qualified stock options and stock awards to employees, officers, directors, and consultants of the Company and its subsidiaries at prices determined by the Company’s Board of Directors. In May 2021, the Company's shareholders approved the Company's Fourth Amended and Restated 2010 Stock Incentive Plan to reserve an additional 11,000,000 shares of common stock for issuance under the 2010 Plan. The Company can issue up to 23,190,000 shares of its common stock pursuant to awards granted under the 2010 Plan. Options become exercisable as determined by the Board of Directors and expire up to ten years from the date of grant. The 2010 Plan uses a “fungible share” concept under which each share of stock subject to awards granted as options and stock appreciation rights (“SARs”), will cause one share per share under the award to be removed from the available share pool, while each share of stock subject to awards granted as restricted stock, restricted stock units, other stock-based awards or performance awards where the price charged for the award is less than 100% of the fair market value of the Company’s common stock will cause 1.3 shares per share under the award to be removed from the available share pool. As of December 31, 2021, the Company has only granted options to purchase shares of the Company’s common stock with an exercise price equal to the closing market price of the Company’s common stock on the Nasdaq Global Market on the grant date. As of December 31, 2021, 13,545,440 shares remained available for grant under the 2010 Plan.

During the year ended December 31, 2021, the Company’s board of directors granted options to purchase 1,128,900 shares of the Company’s common stock to officers and employees of the Company under the 2010 Plan. These options vest and become exercisable as to 25% of the shares underlying the award after the first year and as to an additional 6.25% of the shares underlying the award in each subsequent quarter, based upon continued employment over a four-year period, and are exercisable at a price equal to the closing price of the Company’s common stock on the Nasdaq Global Market on the grant dates.

During the year ended December 31, 2021, the Company’s board of directors granted options to its non-employee directors to purchase 157,000 shares of common stock under the 2010 Plan, which will vest and become exercisable in one year from the date of grant. These options were granted at an exercise price that equaled the closing market price of the Company’s common stock on the Nasdaq Global Market on the grant date.

During the year ended December 31, 2021, the Company’s board of directors did not grant any restricted stock awards (“RSA”) to officers of the Company.

Nonstatutory Inducement Grants

For certain new employees the Company issued options as an inducement equity award under Nasdaq Listing Rule 5635(c)(4) outside of the 2010 Plan. The option will vest as to 25% of the shares underlying the option on the first anniversary of the grant date, and as to an additional 6.25% of the shares underlying the option on each successive three-month period thereafter. During the year ended December 31, 2021, the Company’s board of directors granted inducement equity awards of 720,200 shares of common stock. These options were granted at an exercise price that equaled the closing market price of the Company’s common stock on the Nasdaq Global Market on the grant date.

A summary of stock option activity under the 2010 Plan and inducement awards are summarized as follows:


	Number of Options	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (000's)
Outstanding, December 31, 2020	8,668,005	$	2.71	7.98
Granted	2,006,100	9.07
Exercised	(98,886)	1.67
Canceled	(211,450)	10.09
Outstanding, December 31, 2021	10,363,769	$	3.80	7.41	$	24,749
Exercisable at December 31, 2021	6,127,217	$	3.24	6.77	$	16,572
Vested and unvested expected to vest	10,083,019	$	3.76	7.37	$	24,287

The weighted average grant date fair values of stock options granted during the years ended December 31, 2021, 2020, and 2019 were $7.25, $0.84, and $0.85, respectively, and were calculated using the following estimated assumptions under the Black-Scholes option pricing model:


	For the Year Ended December 31,
	2021	2020	2019
Expected term (years)	5.5	5.5	5.5


Risk-free interest rate	0.4-1.4%	0.4-1.7%	1.5-2.6%
Expected volatility	107-111%	80-81%	76-79%
Expected dividend yield	None	None	None

As of December 31, 2021, there was approximately $10.6 million of unrecognized compensation cost related to unvested employee stock option awards outstanding, net of the impact of estimated forfeitures that is expected to be recognized as expense over a weighted average period of 2.1 years. The intrinsic value of employee stock options exercised during the year ended December 31, 2021 was $0.3 million.

Restricted Stock Awards

The following table presents a summary of outstanding RSAs under the 2010 Plan as of December 31, 2021:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested, December 31, 2020	20,624	$	3.45
Awarded	—	—
Vested	(10,312)	3.45
Forfeited	—	—
Unvested, December 31, 2021	10,312	$	3.45

As of December 31, 2021, there were 10,312 shares outstanding covered by RSAs that are expected to vest. The weighted average grant date fair value of these shares of restricted stock was $3.45 per share and the aggregate fair value of these shares of restricted stock was less than $0.1 million. As of December 31, 2021, there was less than $0.1 million of unrecognized compensation costs, net of estimated forfeitures, related to RSAs granted to officers and non-employee directors, which are expected to be recognized as expense over a remaining weighted average period of less than 0.1 years.

Amended and Restated 2010 Employee Stock Purchase Plan

The Company has reserved 2,000,000 of its shares of common stock for issuance under the ESPP. Eligible employees may purchase shares of the Company’s common stock at 85% of the lower closing market price of the common stock at the beginning of the enrollment period or ending date of the any purchase period within a two-year enrollment period, as defined. The Company has four six-month purchase periods per each two-year enrollment period. If, within any one of the four purchase periods in an enrollment period, the purchase period ending stock price is lower than the stock price at the beginning of the enrollment period, the two-year enrollment resets at the new lower stock price. This aspect of the plan was amended in 2017. Prior to 2017, the plan included two six-month purchase period per year with no defined enrollment period. During the year ended December 31, 2021, 43,860 shares were issued under the ESPP. As of December 31, 2021, there were 1,553,530 shares available for future purchase under the ESPP.

For the years ended December 31, 2021, 2020, and 2019, the Company recorded compensation expense related to its ESPP and calculated the fair value of shares expected to be purchased under the ESPP using the Black-Scholes models with the following assumptions:


	For the Year Ended December 31,
	2021	2020	2019
Expected term	6-24 months	6-24 months	6 - 24 months
Risk-free interest rate	0.1-0.5%	0.1-0.2%	1.5-2.1%
Volatility	51-154%	97-219%	92-97%
Dividends	None	None	None

Total Stock-Based Compensation Expense

For the years ended December 31, 2021, 2020, and 2019, the Company recorded employee and non-employee stock-based compensation expense to the following line items in its Costs and Expenses section of the Consolidated Statements of Operations and Comprehensive Loss:


	For the Year Ended December 31,
	2021		2020		2019
Research and development expenses	$	1,844	$	731	$	575
General and administrative expenses	3,435		1,967		2,083
Total stock-based compensation expense	$	5,279	$	2,698	$	2,658

No income tax benefits have been recorded for the years ended December 31, 2021, 2020, and 2019, as the Company has recorded a full valuation allowance and management has concluded that it is more likely than not that the net deferred tax assets will not be realized (see Note 14).