Equity Incentive Plan

3 Months Ended

Mar. 31, 2024

Equity Incentive Plan

Equity Incentive Plan

Note 11 – Equity Incentive Plan

The Company’s Board and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which took effect on May 12, 2014. The Company’s Board and stockholders adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which took effect on September 11, 2020. From the adoption and approval of the 2020 Plan, no new awards have been or will be made under the 2014 Plan.

The 2020 Plan allows for the issuance of securities, including stock options to employees, Board members and consultants. The initial number of shares of Common Stock available for issuance under the 2020 Plan was 238 shares, which will, on January 1 of each calendar year, unless the Board decides otherwise, automatically increase to equal ten percent (10)% of the total number of shares of Common Stock outstanding on December 31 of the immediately preceding calendar year, calculated on an As Converted Basis. As Converted Shares include all outstanding shares of Common Stock and all shares of Common Stock issuable upon the conversion of outstanding preferred stock, warrants and other convertible securities, but will not include any shares of Common Stock issuable upon the exercise of options and other convertible securities issued pursuant to either the 2014 Plan, the 2020 Plan, or the IMGX Plan. The number of shares permitted to be issued as “incentive stock options” (“ISOs”) is 357 under the 2020 Plan.

On March 13, 2024, in connection with the IMGX acquisition, the Company assumed the IMGX Plan, including all 200,652 IMGX stock options immediately outstanding prior to the IMGX acquisition, with each becoming an option to purchase Common Stock, subject to adjustment. Such stock options were the only awards that had been made under the IMGX Plan as of the closing of the IMGX acquisition. The IMGX Plan was adopted and approved by the board of directors and stockholders of IMGX in 2021. Following the assumption of the IMGX Plan by the Company, no new awards have been or will be made under the IMGX Plan.

As of January 1, 2024, the number of shares of Common Stock available for issuance under the 2020 Plan automatically increased to 334,078 under the 2020 Plan’s evergreen provision.

As of March 31, 2024, there were an aggregate of 73 total shares available (but un-issuable) under the 2014 Plan, of which 28 are issued and outstanding, and 9 shares are reserved subject to issuance of restricted stock and RSUs.

As of March 31, 2024, there were an aggregate of 350,000 total shares available (but un - issuable) under the IMGX 2021 Plan, of which 200,652 are issued and outstanding.

As of March 31, 2024, 334,078 total shares were authorized under the 2020 Plan, of which 178,874 were issued and outstanding and 155,204 shares were available for potential issuances.

During the three months ended March 31, 2024 and 2023, stock option activity under the 2014 Plan, 2020 Plan, and IMGX 2021 Plan was as follows:

		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2024	426	$	6,103.81	8.53	$	—
Assumed from IMGX	200,652		0.81	7.56		716,328
Outstanding at March 31, 2024	201,078	$	13.74	7.56	$	716,350
Exercisable at March 31, 2024	201,054	$	11.99	7.56	$	716,341
Outstanding at January 1, 2023	176	$	15,956.72	8.22	$	—
Granted	250		74.60	9.91		—
Outstanding at March 31, 2023	429	$	8,900.40	9.07	$	—
Exercisable at March 31, 2023	200	$	17,091.40	8.40	$	—

During the three months ended March 31, 2024, the Company assumed fully vested options to purchase 200,652 shares of the Company’s Common Stock issued under the IMGX 2021 Plan. During the three months ended March 31, 2023, the Board approved the grant of options to purchase 250 shares of the Company’s Common Stock pursuant to the 2020 Plan. In general, options granted under the 2020 Plan vest monthly over a 36-month period.

For the three months ended March 31, 2024 and 2023, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes Option Pricing Model with the following weighted-average assumptions:

	2024		2023
Contractual term (in years)	7.6		6.5
Expected Volatility	110.35	%	98.80	%
Risk-free interest rate	4.20	%	4.08	%
Expected Dividend yield	0	%	0	%

Using the Black-Scholes Option Pricing Model, the estimated weighted average fair value of an option to purchase one share of common stock assumed during the three months ended March 31, 2024 was $6.32. The estimated weighted average fair value of an option to purchase one share of common stock granted during the three months ended and March 31, 2023 was $61.00.

Restricted Stock and Restricted Stock Units

Restricted stock refers to shares of Common Stock subject to vesting based on certain service, performance, and market conditions. Restricted stock units (“RSUs”) refer to an award which constitutes a promise to grant shares of Common Stock at the end of a specified restriction period.

As of each March 31, 2024 and March 31, 2023, under the 2014 Plan, the Company had 5 shares of restricted stock outstanding and an aggregate unrecognized restricted Common Stock expense of approximately $269,500, which will be recognized when vesting of certain milestones become probable.

During the three months ended March 31, 2024 and March 31, 2023, RSU activity under the 2020 Plan was as follows:

		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2024	52,271	$	4.31	9.96
Awarded	120,532		3.80	—
Vested	(52,271)		4.31	—
Non-vested Outstanding at March 31, 2024	120,532	$	3.82	9.76
Non-vested Outstanding at January 1, 2023	—		—	—
Awarded	7,997	$	124.00	—
Vested	(2,003)		124.00	—
Non-vested Outstanding at March 31, 2023	5,994	$	124.00	0.75

During the three months ended March 31, 2024 and March 31, 2023, the Board approved the grant of 120,532 and 7,997 RSUs, respectively. All grants of RSUs were pursuant to the 2020 Plan and vest quarterly over a one-year period.

The total stock-based compensation expense for employees and non-employees is included in the accompanying condensed consolidated statements of operations and as follows:

	Three Months Ended March 31,
	2024		2023
Research and development	$	42,378	$	38,080
General and administrative		228,982		320,236
Total stock-based compensation expense	$	271,360	$	358,316

As of March 31, 2024, the Company had unrecognized stock-based compensation expense related to stock options and RSUs of approximately $0.6 million. Approximately $0.5 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock awards of 0.76 years. Approximately $0.1 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.

As of March 31, 2023, the Company had unrecognized stock-based compensation expense related to stock options and RSUs of approximately $1.1 million. Approximately $0.9 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock awards of 0.94 years. Approximately $0.2 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.