Note 8 - Stock-based Compensation

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

8. Stock-Based Compensation

Stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 was classified in the condensed consolidated statement of operations as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(000’s)				(000’s)
Research and development	$	458	$	146	$	1,382	$	229
General and administrative		1,663		1,482		2,742		2,666
Total	$	2,121	$	1,628	$	4,124	$	2,895

As of June 30, 2024, remaining unrecognized stock-based compensation cost from all plans to be recognized in future periods totaled $19.4 million.

2020 Plan

In June 2020, the Company’s board of directors adopted the 2020 Stock Option and Incentive Plan (the “2020 Plan”) and reserved 2.9 million shares of common stock for issuance under this plan. The 2020 Plan includes automatic annual increases. The increase on January 1, 2024 was 5.1 million shares. As of June 30, 2024, 4.5 million shares remain available for grant.

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:

			Weighted		Weighted
	Number of		Average		Average		Aggregate
	Unvested		Exercise		Remaining		Intrinsic
	Options		Price		Contractual		Value
	(000's)		Per Share		Term (in years)		($000's)
Outstanding at December 31, 2023		7,876	$	3.81		8.05	$	11
Granted		3,453	$	1.82		9.55		—
Exercised		—	$	—		—		—
Forfeited/canceled		—	$	—		—		—
Outstanding at June 30, 2024		11,329	$	3.21		8.16	$	—
Vested at June 30, 2024		5,114	$	3.95		7.27	$	—

For the six months ended June 30, 2024, the weighted average grant date fair value for options granted was $1.82. The options had no intrinsic value as of June 30, 2024. As of June 30, 2024, the total unrecognized compensation cost related to outstanding options was $11.4 million, to be recognized over a weighted average period of 1.5 years.

For the six months ended June 30, 2023, the weighted average grant date fair value for options granted was $2.85. The intrinsic value for options vested as of June 30, 2023, was $0.6 million. As of June 30, 2023, the total unrecognized compensation cost related to outstanding options was $11.3 million, to be recognized over a weighted average period of 3 years.

The weighted average assumptions used in the Black-Scholes pricing model to determine the fair value of stock options granted during the six months ended June 30, 2024 and 2023 were as follows:

	Six Months Ended June 30,
	2024			2023
Expected term (in years)		6.0			6.0
Risk-free rate		4.04	%		3.80	%
Expected volatility		80	%		88	%
Expected dividend yield		—			—

As of January 2024, the Company used the historical price of only its own stock to determine the expected volatility. Prior to this, a group of industry peers, including the Company’s stock price, was used.

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, 2023		1,500		$	3.89	$	5,835
Granted		2,391			1.93		4,615
Vested		(225	)		3.93		(884	)
Forfeited or canceled		—			—		—
Unvested, June 30, 2024		3,666		$	2.61	$	9,565

The 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 June 30, 2024, remaining unrecognized compensation cost related to RSUs to be recognized in future periods totaled $8.0 million, which is expected to be recognized over a weighted average period of 1.8 years.