Stock-Based Compensation

6 Months Ended

Jun. 30, 2021

5. Stock-Based Compensation

Following is the stock-based compensation expense related to common stock options, restricted common stock, common stock warrants and deferred stock units:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	in thousands
Research and development	$	89	$	83	$	156	$	240
General and administrative		492		311		679		584

Total stock-based compensation expense	$	581	$	394	$	835	$	824

The following table summarizes the stock option activity in the Company’s equity incentive plans, including

non-plan

grants to Company executives, from December 31, 2020 through June 30, 2021:


	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2020		3,987,575		$	4.29
Granted		2,065,000			2.20
Exercised		(252,500	)		2.19
Options forfeited/cancelled		(880,350	)		5.52

Outstanding, June 30, 2021		4,919,725		$	3.30

As of June 30, 2021, there was $3,532,185 of unrecognized compensation related to 2,413,751 unvested options, which is expected to be recognized over a weighted–average period of approximately 2.15 years. The weighted-average grant date fair value for options granted during the six months ended June 30, 2021 was $1.63. The Company granted 2,065,000 stock options during the six months ended June 30, 2021. During the six months ended June 30, 2021, 252,500 stock options were exercised on a net basis resulting in the issuance of 109,201 shares of common stock.

The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:


	Six Months Ended June 30,			Six Months Ended June 30,
	2021			2020
Risk-free interest rate		0.57	%		1.55	%
Expected life of the options		6 years			6 years
Expected volatility of the underlying stock		91	%		100	%
Expected dividend rate		0	%		0	%

In January 2020, two directors elected to take restricted stock grants in lieu of cash retainers for 2020. A total of 32,693 shares of restricted stock valued at approximately $93,500 was amortized to expense on a straight-line basis until January 9, 2021 when the stock vested in full.

In March 2021, one director elected to take a restricted stock grant in lieu of cash retainers for 2021. A total of 16,588 shares of restricted stock valued at approximately $35,000 is being amortized to expense on a straight-line basis until December 31, 2021 when the stock vests in full.

In September 2020, the Company entered into an employment agreement with its new Chief Executive Officer whereby 20% of his base salary and performance bonuses will be paid in cash, and 80% will be paid in the form of deferred stock units (“

DSUs

”) in accordance with the terms and subject to the provisions set forth in the DSU Agreement. DSUs credited to Mr. Lewis as of any date shall be fully vested and nonforfeitable at all times. The Company shall issue the shares underlying the outstanding whole number of DSUs credited to Mr. Lewis as follows: twenty five percent shall be issued on March 1, 2023, twenty five percent shall be issued on September 1, 2023 and fifty percent shall be issued on March 1, 2024. For the six months ended June 30, 2021, $200,000 of his compensation was recorded as stock compensation expense representing 73,946 shares of common stock to be issued under the DSU agreement with a weighted average grant date fair value of $2.70 per share. Also, Mr. Lewis’ bonus for the year ended December 31, 2020 of $60,000 (which was included in accrued compensation at December 31, 2020) was approved in March 2021 and represents 27,027 shares of common stock to be issued under the DSU agreement with a grant date fair value of $2.22 per share. The $60,000 was reclassified from accrued compensation to additional paid in capital in March 2021. There is no unrecognized compensation expense related to the DSUs.