XML 39 R22.htm IDEA: XBRL DOCUMENT v3.25.0.1
SHARE-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
SHARE-BASED COMPENSATION SHARE-BASED COMPENSATION
2023 Equity Incentive Plan
The Company maintains the 2023 Equity Incentive Plan (the "2023 Plan") and previously maintained the 2019 Equity Incentive Plan (the “2019 Plan”) and 2018 Omnibus Incentive Plan (the "2018 Plan"). Following stockholder approval during the year ended December 31, 2023, any shares then available for future grant under the 2019 Plan and 2018 Plan were allocated to the 2023 Plan and no further grants could be made under the 2018 Plan and the 2019 Plan. In December 2024, stockholders approved a proposal to amend the 2023 Plan to further increase shares available for grant under the 2023 Plan by 1,520,000 shares. As of December 31, 2024, 1,574,557 shares remained issuable under the 2023 Plan.
2024 Inducement Plan
On February 28, 2024, the Board approved the Company's 2024 Inducement Plan (the "Inducement Plan"). Pursuant to the Inducement Plan and Nasdaq Listing Rule 5635(c)(4), the Company is permitted to grant equity awards as an inducement material to an individual's entering into employment with the Company, subject to certain conditions ("Inducement Grants"). In November 2024, the Board reduced the number of shares available to be issued under the Inducement Plan to one share. As of December 31, 2024, there was one share available for future Inducement Grants.
2019 Employee Share Purchase Plan
The Company has adopted an Employee Share Purchase Plan ("ESPP") pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85% of the lesser of the
fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”). Employees are permitted to purchase the number of shares purchasable with up to 15% of the earnings paid (as such term is defined in the ESPP) to each of the participating employees during the Purchase Period, subject to certain limitations under Section 423 of the U.S. Internal Revenue Code.        
As of December 31, 2024, 87,122 shares remained available for grant under the ESPP.
During the years ended December 31, 2024 and 2023, 14,080 and 15,261 shares were purchased by employees pursuant to the ESPP, respectively.
Options and Restricted Stock Units ("RSUs") granted to employees and directors
For the years ended December 31, 2024 and 2023, the Company granted options and RSUs to employees and directors as follows:
Year ended December 31, 2024
Award amountExercise price rangeVesting periodExpiration
Options870,000 
$1.96 - $2.40
1 year - 4 years
10 years
RSUs435,000 — 4 years— 

Year ended December 31, 2023
Award amountExercise price rangeVesting periodExpiration
Options535,000 
$2.70
1 year - 4 years
10 years
RSUs435,000 — 4 years— 

During the years ended December 31, 2024 and 2023, the fair value of options and RSUs granted to employees and directors was $2.6 million and $2.4 million, respectively. The fair value of RSUs granted is based on the share price on grant date. One share of common stock will be issued upon settlement of each RSU that vests.
The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on a combination of historical volatilities of companies in comparable stages as well as companies in the industry, by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted in dollar terms. The Company’s management uses the expected term of each option as its expected life. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options.
The underlying data used for computing the fair value of the options are as follows:
Year ended December 31,
20242023
Exercise price
$1.96 - $2.40
$2.70
Dividend yield— %— %
Expected volatility
104.00% - 105.73%
104.42% - 105.64%
Risk-free interest rate
3.95% - 4.32%
4.04%
Expected term6 years6 years
Modification of share-based compensation
On November 10, 2019, Menlo Therapeutics Inc. ("Menlo") entered into a merger agreement (the "Merger Agreement") with Foamix Pharmaceuticals Ltd. ("Foamix") and Giants Merger Subsidiary Ltd., a wholly-owned subsidiary of Menlo ("Merger Sub"). On March 9, 2020, Merger Sub merged with and into Foamix, with Foamix surviving as a wholly-owned subsidiary of Menlo (the "Merger"). The combined company changed its name to VYNE in September 2020. Pursuant to the Merger, all outstanding options and RSUs granted by Foamix were exchanged for stock options and RSUs of Menlo’s common stock according to the exchange ratio set forth in the Merger Agreement. In addition, for each option and RSU the holder received a contingent stock right ("CSR"). This transaction was considered to be a modification under ASC 718, Compensation - Stock Compensation. The modification did not affect the remaining requisite service period. As a result of the modification, for outstanding options and RSUs granted to Foamix employees and consultants, the Company recorded immaterial incremental compensation expense. On April 6, 2020, pursuant to the terms of the agreement governing the CSRs, each CSR was converted into 1.2082 shares of Menlo common stock, resulting in an effective exchange ratio in the Merger of 1.8006 shares of Menlo common stock for each Foamix ordinary share. As a result of the modification, for outstanding options and RSUs granted to Foamix employees and consultants, the Company recorded incremental compensation expense of $7 thousand and $46 thousand for the years ended December 31, 2024 and 2023, respectively.
Summary of outstanding and exercisable options and RSUs
The following table summarizes stock option activity for the year ended December 31, 2024:
Number of optionsWeighted Average Exercise Price
Outstanding at December 31, 2023744,537 $40.65 
Granted870,000 2.27 
Forfeited(25,572)2.94 
Expired(4,661)222.61 
Outstanding at December 31, 20241,584,304 $19.65 
Exercisable at December 31, 2024397,143 $70.32 
The weighted average grant date fair value of options granted during the years ended December 31, 2024 and 2023 was $1.6 million and $1.2 million, respectively. The weighted average remaining contractual term of outstanding and exercisable options as of December 31, 2024 was 8.62 years and 7.06 years, respectively. Total unrecognized share-based compensation for options at December 31, 2024 was $1.9 million, which is expected to be recognized over a weighted average period of 2.76 years.
The intrinsic value of outstanding and exercisable options was $1.3 million and $134 thousand, respectively, as of December 31, 2024.
The following table summarizes RSU activity for the year ended December 31, 2024:
Number of RSUsWeighted Average Grant Date
Fair Value
Outstanding at December 31, 2023460,979 $4.99 
Awarded435,000 2.33 
Vested(119,724)9.76 
Forfeited(25,540)2.79 
Outstanding at December 31, 2024750,715 $2.77 
The weighted average remaining contractual term of outstanding RSUs as of December 31, 2024 was 1.52 years. Total unrecognized compensation expense related to the unvested portion of the RSUs at December 31, 2024 was $1.8 million, which is expected to be recognized over a weighted average period of 3.11 years.
Share-based compensation expenses
The following table illustrates the allocation of share-based compensation expense on the line items on the statements of operations and comprehensive loss:
Year ended December 31,
(in thousands)20242023
Research and development
$548 $534 
General and administrative
2,755 2,771 
Total
$3,303 $3,305