SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

11. STOCK-BASED COMPENSATION

On October 26, 2010, the Company’s Board of Directors adopted, and the Company’s shareholders subsequently approved, the 2010 Equity Incentive Plan (as subsequently amended, the “2010 Plan”). The 2010 Plan provided

for grants of incentive stock options to employees, and nonqualified stock options and restricted common stock to employees, consultants, and non-employee directors of the Company.

In April 2015, the Company’s Board of Directors adopted, and the Company’s shareholders subsequently approved, the 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for grants of incentive stock options to employees, and nonqualified stock options, restricted common stock, restricted stock units (“RSUs”), and stock appreciation rights to employees, consultants, and non-employee directors of the Company.

As of June 30, 2021, the total number of shares available to be issued under the 2015 Plan was 67,419 shares, consisting of (i) 5,333 shares initially authorized under the 2015 Plan shares, (ii) the shares that remained available for grant under the 2010 Plan at the time of its termination adjusted for cumulative cancellations, forfeitures and issuances from the 2010 Plan and 2015 Plan, (iii) the 26,667 shares approved for increase during the January 2020 shareholders meeting and, (iv) the 400,000 shares approved for increase during the 2020 Annual Meeting.

Options issued under the 2010 Plan, and 2015 Plan (collectively, the “Plans”) are exercisable for up to 10 years from the date of issuance.

Stock-based compensation

For the three and six month periods ended June 30, 2021 and 2020, stock-based compensation recognized was classified in the consolidated statements of operations as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2021		2020		2021		2020
Research and development	$	6	$	7	$	9	$	27
General and administrative		89		38		138		88
Total	$	95	$	45	$	147	$	115

The fair value of each option award is estimated on the date of grant using the Black‑Scholes option pricing model, which uses the following assumptions; (i) Risk-free interest rate, (ii) Expected dividend yield, (iii) Expected term and (iv) Expected volatility. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the financial statements, to estimate option exercises within the valuation model. The expected term of options granted under the Plans, all of which qualify as “plain vanilla,” is based on the average of the contractual term (10 years) and the vesting period (generally, 48 months). For non‑employee options, the expected term is the contractual term. The risk‑free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. The impact of forfeitures on compensation expense is recorded as they occur.

The Company grants RSUs and restricted stock awards (“RSAs”), collectively referred to as restricted securities under the 2015 Equity Incentive Plan. These restricted securities generally vest over a three-year period, contingent on the recipient’s continued employment. Prior to vesting, all RSAs have the right to vote and receive dividends under the 2015 Equity Incentive Plan; however, the Company’s form of Restricted Stock Agreement provides that the payment of dividends on unvested RSAs shall be deferred until such time as the shares vest. The grant date fair value of these awards is based on the fair market value of our common stock on the date of grant.

The Company did not grant any awards during the three and six months ended June 30, 2020. The Company did not grant any awards during the three months ended June 30, 2021. The assumptions used principally in determining the fair value of options granted during the six months ended June 30, 2021 were as follows:

	June 30,
	2021
Risk-free interest rate	1.03%
Expected dividend yield	0%
Expected term (employee grants)	5.70
Expected volatility	117.34%

Stock options

A summary of option activity as of June 30, 2021 and changes for the six month period then ended are presented below:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
Options	Shares	Price		Term in Years	Value
Outstanding as of December 31, 2020	4,169	$	1,054.01	7.18		$	—
Granted	360,000	$	1.10
Cancelled/Forfeited	(147)	$	6,324.03
Outstanding as of June 30, 2021	364,022	$	10.61	9.68		$	—
Vested and Exercisable as of June 30, 2021	3,013	$	1,128.91	6.64		$	—
Vested and expected to vest as of June 30, 2021	364,022	$	10.61	9.68		$	—

The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2021 was $0.93. The total fair value of options that vested in the three and six months ended June 30, 2021 was $10 thousand and $63 thousand, respectively. The total fair value of options that vested in the three and six months ended June 30, 2020 was $24 thousand and $80 thousand, respectively. During the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $70 thousand and $98 thousand, respectively, related to stock options. During the three and six months ended June 30, 2020, the Company recorded stock-based compensation expense of $21 thousand and $64 thousand, respectively, related to stock options. As of June 30, 2021, total unrecognized compensation expense related to non-vested share-based option compensation arrangements amounted to $297 thousand and is estimated to be recognized over a period of 1.46 years.

Restricted Securities

The following table summarizes the restricted securities activity under the 2015 Plan during the three month period ended June 30, 2021:

		Weighted-Average
Restricted Securities	Number of Grants	Grant Date Fair Value
Unvested balance as of December 31, 2020	6,402	$	25.67
Vested	(50)	$	660.00
Unvested balance as of June 30, 2021	6,352	$	20.67

During the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $25 thousand and $49 thousand, respectively, related to the time-based restricted securities. During the three and six months ended June 30, 2020, the Company recorded stock-based compensation expense of $24 thousand and $51 thousand, respectively, related to the time-based restricted securities. As of June 30, 2021, total unrecognized compensation expense related to non-vested restricted securities amounted to $71 thousand which the Company expects to recognize over a remaining weighted-average of one year. All the restricted securities that remain unvested and outstanding as of June 30, 2021 are subject to time-based vesting.