Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Note 5— Stock-Based Compensation

Stock Options and Restricted Stock Awards

The Company has various share-based compensation plans, including the Third Amended and Restated 2017 Equity Incentive Plan, the 2013 Non-Employee Directors’ Equity Incentive Plan and the 2021 Inducement Plan (collectively, the “Plans”). The Plans are designed to assist in attracting, motivating and retaining employees and directors and to recognize the importance of employees to the long-term performance and success of the Company. The Company has also granted stock options to certain non-employees outside of the Plans.

The Company recognized stock-based compensation expense related to grants of stock options and common stock awards to employees, directors and consultants of $1.3 million, and $1.3 million during the years ended December 31, 2021 and 2020, respectively. The following table summarizes the stock-based compensation expense which was recognized in the consolidated statements of operations for the years ended December 31,

(Dollars in thousands)	2021		2020
Selling, general and administrative	$	1,171	$	1,252
Research and development		143		97
Total	$	1,314	$	1,349

The majority of the RSUs and options to purchase common stock vest on the anniversary of the date of grant, which ranges from one to four years. Stock-based compensation expense related to these awards is recognized on a straight-line basis over the related vesting term in most cases, which generally is the service period. It is the Company’s policy to issue new shares upon the exercise of options.

Stock Options: The following is a summary of the Plans’ stock option activity during the years ended December 31:

	2021					2020
	Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price
Beginning Balance		16,889		$	405.34		13,471		$	515.33
Granted		912,999			4.46		5,542			10.03
Exercised		—			—		—			—
Forfeited/expired		(175,363	)		27.76		(2,124	)		71.51
Outstanding at December 31		754,525		$	8.00		16,889		$	405.34
Vested at December 31		43,691		$	64.16		7,254		$	697.37

For options outstanding and vested at December 31, 2021, the weighted average remaining contractual life was 9.38 years and 9.09 years, respectively. There were no option exercises in 2021 or 2020. The total fair value of options that vested in 2021 and 2020 was $0.7 million, and $1.7 million, respectively, at the fair value of the options as of the date of grant.

Valuation Assumptions: The fair value of each stock option is estimated at the grant date using the Black-Scholes option pricing model. The fair value of stock options under the Black-Scholes option pricing model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price, and expected dividends.

The Company has not historically paid cash dividends to its stockholders, and currently does not anticipate paying any cash dividends in the foreseeable future. As a result, the Company has assumed a dividend yield of 0%. The risk-free interest rate is based upon the rates of U.S. Treasury bills with a term that approximates the expected life of the option. Since the Company has limited historical exercise data to reasonably estimate the expected life of its option awards, the expected life is calculated using a simplified method. Expected volatility is based on historical volatility of the Company’s stock.

The following table provides the weighted average assumptions used in the Black-Scholes option pricing model for the years ended December 31:

	2021			2020
Expected dividend yield		0	%		0	%
Risk-free interest rate		1.19	%		0.65	%
Expected volatility		131.03	%		127.87	%
Expected life (in years)		6.21			5.91

The weighted-average fair value of stock options granted in 2021 and 2020 was $3.98 and $8.79, respectively. As of December 31, 2021, the total compensation cost related to all non-vested stock option awards not yet recognized was approximately $2.4 million and is expected to be recognized over the remaining weighted-average period of 3.19 years.

Warrants: Warrants to purchase 1,631,798 and 1,631,948 shares of common stock were outstanding on December 31, 2021 and 2020, respectively. As of December 31, 2021, warrants outstanding were exercisable at prices ranging from $2.50 to $41,916 per share, and are exercisable over a period ranging from 3 months to 3.85 years.