SHARE-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Compensation Plans

The Company has five share-based compensation plans, including the 2019 Equity Incentive Plan (the "2019 Plan"), which was adopted in June 2019. Each plan authorizes the granting of shares of common stock and options to purchase common stock to employees and directors of the Company, as well as non-employee consultants, and allows the holder of the option to purchase common stock at a stated exercise price. The only plan under which the Company may currently grant equity awards is the 2019 Plan although there remain outstanding awards under the other four plans. Options vest according to the terms of the grant, which may be immediately or based on the passage of time, generally over two to four years, and have a term of up to 10 years. Unexercised stock options terminate on the expiration date of the grant. The Company recognizes the share-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period.

2019 Equity Incentive Plan

The 2019 Plan, is designed to secure and retain the services of the Company’s employees and directors. The 2019 Plan is successor to and continuation of the 2014 Equity Incentive Plan, as amended, the (“2014 Plan”), and no additional awards may be issued from the 2014 Plan. Subject to adjustment for certain changes in the Company’s capitalization, the aggregate number of shares of common stock that may be issued under the 2019 Plan (the “Share Reserve”) will not exceed the sum of (i) 250,000 new shares, (ii) an additional 600,000 shares that were approved at the Company’s Special Meeting of Stockholders in January 2020, (iii) an additional 500,000 shares that were approved at the Company's Annual Meeting of Stockholders in June 2020, (iv) an additional 500,000 shares that were approved at the Company's Annual Meeting of Stockholders in June 2021 and plus (v) the Prior Plans’ Returning Shares, as defined in the 2019 Plan documents, in an amount not to exceed 600,540 shares, including any stock award granted under the 2014 Plan, 2011 Stock Option Plan, as amended, or 2006 Stock Option Plan, as amended, that were outstanding as of the date the 2019 Plan were approved by the Company's stockholders, as such shares become available from time to time.

The following shares of common stock (the “2019 Plan Returning Shares”) will also become available again for issuance under the 2019 Plan: (i) any shares subject to a stock award granted under the 2019 Plan that are not issued because such stock award expires or otherwise terminates without all of the shares covered by such stock award having been issued; (ii) any shares subject to a stock award granted under the 2019 Plan that are not issued because such stock award is settled in cash; and (iii) any shares issued pursuant to a stock award granted under the 2019 Plan that are forfeited back to or repurchased by the Company because of a failure to vest.

The 2019 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, and other stock awards.

The following table summarizes the stock option activity for all stock plans during the nine months ended September 30, 2021:


			Options and Inducement Awards
Outstanding at December 31, 2020			1,510,968
Granted			823,000
Exercised			—
Forfeited			(348,691)
Outstanding at September 30, 2021			1,985,277
Exercisable at September 30, 2021			466,587

The following table summarizes the stock award activity for all stock plans during the nine months ended September 30, 2021:


			Restricted Stock Awards and Units
Outstanding at December 31, 2020			129,861
Granted			136,626
Vested			(95,001)
Forfeited			(2,506)
Outstanding at September 30, 2021			168,980

2014 Employee Stock Purchase Plan

The 2014 Employee Stock Purchase Plan (the “ESPP”) provides for eligible Company employees, as defined by the ESPP, to be given an opportunity to purchase the Company's common stock at a discount, through payroll deductions, with stock purchases being made upon defined purchase dates. The ESPP authorizes the issuance of up to 55,000 shares of the Company’s common stock to participating employees and allows eligible employees to purchase shares of common stock at a 15% discount from the lesser of the grant date or purchase date fair market value. During the nine-month periods ended September 30, 2020, there were 9,526 shares purchased by employees under the ESPP. The ESPP has been suspended since December 2020, resulting in the inactivity during the first, second, and third quarter of 2021. As of September 30, 2021, there were 18,488 shares available for issuance under the ESPP.

A summary of activity within the ESPP follows:


	Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020
Deductions from employees	$	—	$	116
Share-based compensation expense recognized	—		70
Remaining share-based compensation expense	—		113

Share-Based Compensation Expense

The fair value of option grants is determined using the Black-Scholes option-pricing model and has been estimated with the following weighted-average assumptions:


	Nine Months Ended
	September 30, 2021		September 30, 2020
Risk-free interest rate	0.84	%	1.18	%
Volatility	90.35	%	81.78	%
Expected life (years)	5.63		6.03
Expected dividend yield	—		—

Share-based compensation expense by classification for the three and nine months ended September 30, 2021 and 2020 are as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Research and development	$	296	$	668	$	829	$	1,877
General and administrative	557		938		1,748		2,616
Total	$	853	$	1,606	$	2,577	$	4,493

At September 30, 2021, total compensation cost not yet recognized was $4.0 million and the weighted-average period over which this amount is expected to be recognized is 1.6 years.