Note 11 - Equity Incentive Plans

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE 

1

1

.  

Equity Incentive Plan

s

Prior to the Merger, Private Vaxart issued equity awards for compensation purposes to employees, directors and consultants under its

2007

Equity Incentive Plan (the

“2007

Plan”). The

2007

Plan expired in

July 2017

and

no

further awards

may

be made under the

2007

Plan. Each outstanding stock option to acquire shares of Private Vaxart stock, whether vested or unvested, was assumed in the Merger after adjustment for the impact of the Conversion and the Reverse Stock Split.

In

November 2016,

Aviragen’s stockholders approved the

2016

Equity Incentive Plan (

“2016

Plan”), under which all outstanding awards under Aviragen’s previous plans became available for issuance under the

2016

Plan if such awards were forfeited or otherwise terminated.

Under the

2016

Plan, Aviragen was authorized to issue incentive stock options (“ISOs”), non-qualified stock options (“NQSOs”), restricted stock (“RSAs”) and restricted stock units (“RSUs”). Awards that expired or were canceled generally became available for issuance again under the

2016

Plan. Awards have a maximum term of

ten

years from the grant date and

may

vest over varying periods, as specified by the Company’s Board of Directors for each grant. Following stockholder approval of the

2019

Equity Incentive Plan (the

“2019

Plan”),

no

further awards are available for grant under the

2016

Plan.

On

April 23, 2019,

the Company’s stockholders approved the adoption of the

2019

Plan, under which the Company is authorized to issue ISOs, NQSOs, stock appreciation rights, RSAs, RSUs, other stock awards and performance awards that

may

be settled in cash, stock, or other property. The

2019

Plan is designed to secure and retain the services of employees, directors and consultants, provide incentives for the Company’s employees, directors and consultants to exert maximum efforts for the success of the Company and its affiliates, and provide a means by which employees, directors and consultants

may

be given an opportunity to benefit from increases in the value of the Company’s common stock.

The aggregate number of shares of common stock that

may

be issued under the

2019

Plan will

not

exceed

1,600,000

shares, which can only be increased by stockholder approval, except that all awards are subject to adjustment in the event of a stock split, stock dividend or other extraordinary dividend, or other similar change in the Company’s common stock or capital structure. Awards that expire or are canceled generally become available for issuance again under the

2019

Plan. Awards have a maximum term of

ten

years from the grant date and

may

vest over varying periods, as specified by the Company’s board of directors for each grant.

A summary of stock option transactions in the

six

months ended

June 30,

2019

, is as follows:

							Weighted
	Shares			Number of			Average
	Available			Options			Exercise
	For Grant			Outstanding			Price
Balance at January 1, 2019		200,650			865,163		$	8.13
Authorized under 2019 Plan		1,600,000			—		$	—
Removed from 2016 Plan		(223,389	)		—		$	—
Granted		(1,413,590	)		1,413,590		$	0.76
Forfeited		—			(7,399	)	$	5.35
Canceled		22,739			(104,554	)	$	11.00
Balance at June 30, 2019		186,410			2,166,800		$	3.19

The weighted average grant date fair value of options awarded in the 

six

months ended

June 30,

 

2019

and 

2018

, was

$0.55

and

$3.59,

respectively. Fair values were estimated using the following assumptions:

	Six Months Ended June 30,
	2019	2018
Risk-free interest rate	1.89% - 2.31%	2.79% - 2.80%
Expected term	5.39 - 6.08 Years	5.84 - 6.05 Years
Expected volatility	83% - 85%	78% - 80%
Dividend yield	—%	—%

The Company measures the fair value of all stock-based awards on the grant date and records the fair value of these awards, net of estimated forfeitures, to compensation expense over the service period. Total stock-based compensation recognized for options was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(in thousands)				(in thousands)
Research and development	$	80	$	59	$	159	$	103
General and administrative		100		59		185		101
Total stock-based compensation	$	180	$	118	$	344	$	204

As of

June 30, 2019

, the unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was

$1.4

million, which the Company expects to recognize over an estimated weighted average period of

2.82

years.