Stock-based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

7. Stock-based Compensation

Restricted Stock Units

Restricted stock units (“RSUs”) are issued under the Company’s 2020 Long-Term Incentive Plan (the “2020 Plan”) or as inducement grants issued outside of the 2020 Plan to new employees. RSUs are generally subject to graded vesting and the satisfaction of certain service requirements. Upon vesting, each outstanding RSU will be settled for one share of the Company’s common stock. Employee RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s income taxes due upon vesting and withholds a number of shares of equal value. The fair value of the RSUs awarded are based upon the Company’s closing stock price at the grant date and are expensed over the requisite service period.

The following table summarizes the activity of the Company’s RSUs for the three months ended March 31, 2023: 

	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Unvested units at December 31, 2022		47,335		$	15.03
Granted		43,500			5.24
Vested		(18,080	)		16.96
Forfeited		–			–
Unvested units at March 31, 2023		72,755		$	8.70

The weighted-average fair value of RSUs granted during the three months ended March 31, 2023 and 2022 was $5.24 and $10.32, respectively.

Stock-based compensation expense related to RSUs was $111,000 and $179,000 for the three months ended March 31, 2023 and 2022, respectively.

The aggregate fair value of awards that vested during the three months ended March 31, 2023 and 2022 was $95,000 and $128,000, respectively, which represents the market value of the Company’s common stock on the date that the RSUs vested.

Stock Options

Stock options are available to be issued under the 2020 Plan and are generally subject to graded vesting and the satisfaction of certain service requirements. Upon the exercise of a stock option, the Company issues new shares and delivers them to the recipient. The Company does not expect to net share settle to satisfy stock option exercises.

The Company used the Black-Scholes option-pricing model to determine the fair value of all its option grants. The risk-free interest rate used for each grant was based upon the yield on zero-coupon U.S. Treasury securities with a term similar to the expected life of the related option. The Company’s expected stock price volatility assumption was based upon the Company’s own implied volatility. The expected life assumption used for option grants was based upon the simplified method provided for under ASC 718. The dividend yield assumption was based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends.

The following table summarizes the activity of the Company’s stock options for the three months ended March 31, 2023: 

	Number of Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Balance at December 31, 2022		177	$	35,231.40
Granted		–		–
Exercised		–		–
Forfeited		–		–
Expired		–		–
Balance at March 31, 2023		177	$	35,231.40	$	–
Exercisable at March 31, 2023		177	$	35,231.40	$	–

Stock-based compensation expense related to stock options for the three months ended March 31, 2022 was $7,000. As of December 31, 2022, the compensation expense for all unvested stock options had been recognized in the Company’s results of operations.

Compensation Expense Related to Equity Awards

The following table sets forth total stock-based compensation expense for the three months ended March 31, 2023 and 2022, in thousands: 

	March 31,
	2023		2022
Research and development	$	63	$	56
General and administrative		48		130
Total stock-based compensation	$	111	$	186