Stockholders' Equity

6 Months Ended

Jun. 30, 2021

Stockholders' Equity

Stockholders' Equity

7. Stockholders’ Equity

In 2005, we adopted the 2005 Stock Option and Incentive Plan (2005 Plan) that authorizes us to grant stock options, restricted stock and other equity-based awards. As of June 30, 2021, 6,565 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2005 Plan. No additional shares are available for issuance under the 2005 Plan.

In August 2014, we adopted our 2014 Equity Incentive Plan, most recently amended in May 2020 (2014 Plan), that authorizes us to grant stock options, restricted stock, and other equity-based awards, subject to adjustment in accordance with the 2014 Plan. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors. As of June 30, 2021, 3,292,114 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2014 Plan, and 941,507 shares of common stock were available for future issuance. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors.

Stock Options

There were 4,622,470 stock options outstanding as of June 30, 2021 at a weighted-average exercise price of $12.25 per share, including 1,323,791 stock options outstanding outside of the 2014 Plan, granted as inducements to new employees. During the six months ended June 30, 2021, 1,585,662 options were granted to employees and directors at a weighted-average exercise price of $13.57 per share. Of the options granted, 1,026,666 options were granted pursuant to the 2014 Plan and 558,996 were granted outside of the 2014 Plan as inducements for new employees.

Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Research and development	$	1,083	$	678	$	2,273	$	1,407
General and administrative		1,827		1,114		5,617		2,260
Total	$	2,910	$	1,792	$	7,890	$	3,667

Restricted Stock

All issued and outstanding restricted shares of common stock are time-based, and become vested between one and three years after the grant date. Compensation expense is recorded ratably over the requisite service period. Compensation expense related to restricted stock is measured based on the fair value using the closing market price of our common stock on the date of the grant.

We issued 15,000 and 5,250 restricted shares of common stock during the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 there were 37,000 restricted shares of common stock outstanding.

Total compensation cost recognized for all restricted stock awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
General and administrative		81		4		136		5
Total	$	81	$	4	$	136	$	5

Preferred Stock

As of June 30, 2021, 4,575 shares of our Series A Convertible Preferred Stock (Preferred Stock) remained outstanding, convertible into 915,000 shares of our common stock. In the second quarter of 2021, 178 shares of our Preferred Stock were converted into 35,600 shares of common stock. In May 2020, a registration statement covering the resale of shares of our common stock underlying our Preferred Stock was declared effective by the SEC. In accordance with the securities purchase agreements underlying the Preferred Stock, the liquidation preference was terminated, and we reclassified the Preferred Stock into permanent equity.

Deemed Dividends

On March 31, 2020, our stockholders approved an amendment to our company charter, which was filed with the Secretary of State of the State of Delaware to increase the number of authorized shares of common stock, which resulted in the recognition of a beneficial conversion feature on our Preferred Stock. Accordingly, we recorded $8.9 million in deemed dividends in the three months ended March 31, 2020, which was calculated as the difference between the conversion price and the fair value of our common stock on the commitment date (transaction date) in connection with the closing of concurrent equity financings during the fourth quarter of 2019.