SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2022

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

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 June 30, 2022, the total number of shares available for issuance under the 2015 Plan was 111,283 shares. While 111,283 shares are available for issuance under the 2015 Plan as of June 30, 2022, only 31,696 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

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operation for each of the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Research and development	$	(17)	$	6	$	(11)	$	9
General and administrative		34		89		84		138
Total	$	17	$	95	$	73	$	147

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 six months ended June 30, 2022.

Stock options

The following table summarizes the stock option activity for the six months ended June 30, 2022:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
Options	Shares	Price		Term in Years	Value
Outstanding at December 31, 2021	14,582	$	437.78	9.18		$	—
Cancelled/Forfeited	(600)	$	27.50
Outstanding as of June 30, 2022	13,982	$	455.39	8.67		$	—
Vested and Exercisable as of June 30, 2022	8,882	$	701.08	8.65		$	—
Vested and expected to vest as of June 30, 2022	13,982	$	455.39	8.67		$	—

The total fair value of options that vested in the three and six months ended June 30, 2022 was $239 thousand, respectively. 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. During the three and six months ended June 30, 2022, the Company recorded stock-based compensation expense of $29 thousand and $77 thousand, respectively, related to stock options. 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. As of June 30, 2022, total unrecognized compensation expense related to non-vested share-based option compensation arrangements amounted to $84 thousand and is estimated to be recognized over a period of 0.71 years.

Restricted Securities

The following table summarizes the restricted securities activity for the six months ended June 30, 2022;

		Weighted-Average
Restricted Securities	Number of Grants	Grant Date Fair Value
Unvested balance as of December 31, 2021	254	$	387.05
Forfeited	(54)	$	385.38
Unvested balance as of June 30, 2022	200	$	387.50

During the three and six months ended June 30, 2022, the Company recorded credits to stock-based compensation expense of $11 thousand and $4 thousand, respectively, related to the time-based Restricted Securities as a result of forfeitures. 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. As of June 30, 2022, total unrecognized compensation expense related to non-vested Restricted Securities amounted to $6 thousand which the Company expects to recognize over a remaining weighted-average of 0.24 years. All the Restricted Securities that remain unvested and outstanding as of June 30, 2022 are subject to time-based vesting.