Stock-Based Compensation

6 Months Ended

Jun. 30, 2016

Share-based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6. Stock-Based Compensation

 

Biostage 2013 Equity Incentive Plan

The Company maintains the 2013 Equity Incentive Plan (the “Plan”) for the benefit of certain of its officers, employees, non-employee directors, and other key persons (including consultants and advisory board members). All options and awards granted under the Plan consist of the Company’s shares of common stock.

The Company also issued equity awards under the Plan at the time of the Distribution to all holders of Harvard Bioscience equity awards as part of an adjustment (the “Adjustment”) to prevent a loss of value due to the Distribution.

Compensation expense recognized under the Plan relates to service provided by employees, board members and a non-employee of the Company. There was no required compensation associated with the Adjustment awards to employees who remained at Harvard Bioscience.

The Company has granted options to purchase common stock and restricted stock units under the Plan. Stock option activity during the six months ended June 30, 2016 was as follows:

	Amount		Weighted-average exercise price
Outstanding at December 31, 2015		3,253,118	$	3.29
Granted		822,500		1.64
Canceled		(275,929)		3.65
Outstanding at June 30, 2016		3,799,689	$	2.91

The Company uses the Black- Scholes model to value its stock options. Weighted average estimated value of stock options granted using the Black-Scholes model during the six months ended June 30, 2016 was $1.08. The weighted average assumptions for valuing those options granted were as follows:

 

Expected volatility	74.29	%
Expected dividends	0.00	%
Expected term in years	6.11
Risk-free rate	1.53	%

There was no material restricted stock unit activity during the six months ended June 30, 2016.

The Company recorded total stock-based compensation during the three and six months ended June 30 as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)				(in thousands)
Research and development	$	180	$	142	$	337	$	373
General and administrative		138		2,303		328		2,810
Total stock-based compensation	$	318	$	2,445	$	665	$	3,183

Included in the above table is stock-based compensation related to the Harvard Bioscience Plan, which is described below.

Harvard Bioscience Stock Option and Incentive Plan

Harvard Bioscience maintains the Third Amended and Restated 2000 Stock Option and Incentive Plan (as amended, the “Harvard Bioscience Plan”) for the benefit of certain of its officers, directors and employees. In connection with the Separation, those employees of Harvard Bioscience who became employees of Biostage were allowed to continue vesting in their stock-based awards of stock options and restricted stock units granted under the Harvard Bioscience Plan. Accordingly, the Company recognizes compensation expense as services are provided by those employees.