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SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

10.

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 March 31, 2022, the total number of shares available for issuance under the 2015 Plan was 110,628 shares. While 110,628 shares are available for issuance under the 2015 Plan as of March 31, 2022, only 51,661 shares can be issued under the 2015 Plan due to restrictions on the usage of the 2015 Plan resulting from the total number of shares of common stock authorized under the Company’s certificate of incorporation.

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 month periods ended March 31, 2022 and 2021, stock-based compensation recognized was classified in the consolidated statements of operations as follows:

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 months ended March 31, 2022.

Stock options

During the three months ended March 31, 2022 there was no activity related to Stock Options. A summary of option activity as of March 31, 2022 is presented below:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
Options	Shares	Price		Term in Years	Value
Outstanding as of March 31, 2022	14,582	$	437.78	8.92		$	—
Vested and Exercisable as of March 31, 2022	8,880	$	686.79	8.90		$	—
Vested and expected to vest as of March 31, 2022	14,582	$	437.78	8.92		$	—

The total fair value of options that vested in the three months ended March 31, 2022 and 2021 was $239 thousand and $53 thousand, respectively. During the three months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense of $48 thousand and $28 thousand, respectively, related to stock options. As of March 31, 2022, total unrecognized compensation expense related to non-vested share-based option compensation arrangements amounted to $127 thousand and is estimated to be recognized over a period of 0.96 years.

Restricted Securities

During the three months ended March 31, 2022 there was no activity related to Restricted Securities. The unvested balance of Restricted Securities as of March 31, 2022 was 254 shares with a weighted average grant date fair value of $387.05.

During the three months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense of $25 thousand and $8 thousand, respectively, related to the time-based Restricted Securities. As of March 31, 2022, total unrecognized compensation expense related to non-vested Restricted Securities amounted to $16 thousand which the Company expects to recognize over a remaining weighted-average of 0.48 years. All the Restricted Securities that remain unvested and outstanding as of March 31, 2022 are subject to time-based vesting.

Three Months Ended
March 31,

(In thousands)

Research and development

General and administrative