Note 9 - Stock-based Compensation

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

9. Stock-Based Compensation

Stock-based compensation expense for the years ended December 31, 2022 and 2021 was classified in the consolidated statements of operations as follows:

	Year Ended December 31,
	2022		2021
	(000's)
Research and development	$	781	$	658
General and administrative		4,549		3,371
Total	$	5,330	$	4,029

Restricted Stock

A summary of the Company’s restricted share activity during the years ended December 31, 2022 and 2021 is as follows:

	Shares (000's)			Estimated Fair Value Per Share
Unvested, December 31, 2020		896		$	2.46
Granted		—		$	—
Vested		(359	)	$	1.83
Forfeited or canceled		(66	)	$	1.70
Unvested, December 31, 2021		471		$	1.76
Granted		—		$	—
Vested		(258	)	$	1.77
Forfeited or canceled		(20	)	$	1.77
Unvested, December 31, 2022		193		$	1.74

The weighted average grant date fair value for unvested restricted stock as of December 31, 2022 was $1.74 per share. As of December 31, 2022, remaining unrecognized compensation cost related to restricted stock awards to be recognized in future periods totaled $0.3 million, which is expected to be recognized over a weighted average period of 0.9 years. No restricted share awards were granted for the year ended December 31, 2022 and 2021.

2020 Plan

In June 2020, the Company’s board of directors adopted the 2020 Plan and reserved 2.9 million shares of common stock for issuance under this plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the 2020 Plan will automatically increase each January 1, beginning on January 1, 2021, by the lesser of (i) 4% of the outstanding number of shares of our common stock on the immediately preceding December 31 or (ii) such number of shares as determined by the plan administrator no later than the immediately preceding December 31. As of December 31, 2022, 2.48 million shares remain available for future grant. On January 1, 2023, an additional 5.06 million shares became available for issuance based on 4% of the outstanding shares of common stock, for a total of 7.54 million shares available for issuance.

The 2020 Plan authorizes the board of directors or a committee of the board to grant incentive stock options, nonqualified stock options, restricted stock awards and restricted stock units ("RSUs") to eligible officers, employees, consultants and directors of the Company. Options generally vest over a period of four years and have a contractual life of ten years from the date of grant.

Stock Options:

The following table summarizes the stock option activity for the 2020 Plan:

	Number of Nonvested Options (000's)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (000's)
Outstanding at December 31, 2020		2,159		$	5.00		9.69	$	—
Granted		1,822		$	5.02		9.27	$	—
Exercised		—		$	—		—	$	—
Forfeited/cancelled		(322	)	$	5.00		—	$	—
Outstanding at December 31, 2021		3,659		$	5.01		8.98	$	—
Granted		2,277		$	2.30		8.81	$	—
Exercised		(6	)	$	2.26		—	$	6
Forfeited/cancelled		(552	)	$	4.78		—	$	118
Outstanding at December 31, 2022		5,378		$	3.89		8.24	$	6,316
Vested at December 31, 2022		2,710		$	4.65		7.62	$	1,216

For the year ended December 31, 2022, the weighted average grant date fair value for options granted was $3.89. The aggregate intrinsic value for options vested and outstanding as of December 31, 2022 was $1.2 million and $6.3 million, respectively. As of December 31, 2022, the unrecognized compensation cost related to outstanding options was $5.9 million, expected to be recognized over a weighted average period of approximately 2.7 years.          

The weighted average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options granted to employees and directors during the years ended December 31, 2022 and 2021 were as follows:

	Year Ended December 31,
	2022			2021
Expected term (in years)		6.0			6.1
Risk-free rate		2.02	%		0.85	%
Expected volatility		94	%		91	%

RSUs:

The following table summarizes the RSU activity for the 2020 Plan:

	Shares (000's)			Weighted Average Price Per Share		Weighted Average Fair Value (000's)
Unvested, December 31, 2020		—		$	—	$	—
Granted		1,200			3.83		4,596
Vested		—			—		—
Forfeited or canceled		—			—		—
Unvested, December 31, 2021		1,200		$	3.83	$	4,596
Granted		—		$	—	$	—
Vested		(300	)		3.83		(1,149	)
Forfeited or canceled		—			—		—
Unvested, December 31, 2022		900		$	3.83	$	3,447

Weighted average price per share is the weighted grant price based on the closing market price of each of the stock grants. The weighted average fair value is the weighted average share price times the number of shares.

As of December 31, 2022, remaining unrecognized compensation cost related to RSUs to be recognized in future periods totaled $3.3 million, which is expected to be recognized over a weighted average period of 2.9 years. As of December 31, 2022, the total unrecognized compensation cost from all plans to be recognized in future periods totaled approximately $9.5 million.