Note 10 - Equity Incentive Plans

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE 10.  Equity Incentive Plans

On April 23, 2019, the Company’s stockholders approved the adoption of the 2019 Equity Incentive Plan (the “2019 Plan”), under which the Company is authorized to issue incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards and restricted stock units, 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. Following adoption of the 2019 Plan, all previous plans were frozen, and on forfeiture, cancellation and expiration, awards under those plans are not assumed by the 2019 Plan.

The aggregate number of shares of common stock authorized for issuance under the 2019 Plan was initially 1,600,000 shares, which was increased through an amendment to the 2019 Plan adopted by the Company’s stockholders on June 8, 2020, to 8,000,000 (the “Plan Amendment”). Further amendments to the 2019 Plan to increase the share reserve would require stockholder approval. 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 three months ended March 31, 2021, is as follows:

							Weighted
	Shares			Number of			Average
	Available			Options			Exercise
	For Grant			Outstanding			Price
Balance at January 1, 2021		1,230,863			6,813,033		$	2.70
Granted		(1,163,000	)		1,163,000		$	6.27
Exercised		—			(207,730	)	$	1.11
Canceled		—			(4,139	)	$	5.17
Balance at March 31, 2021		67,863			7,764,164		$	3.28

As of March 31, 2021, there were 7,764,164 options outstanding with a weighted average exercise price of $3.28, a weighted average remaining term of 8.91 years and an aggregate intrinsic value of $23.5 million. Of these options, 3,007,780 were vested, with a weighted average exercise price of $2.65, a weighted average remaining term of 8.48 years and an aggregate intrinsic value of $11.3 million. The Company received $231,000 for the 207,730 options exercised during the three months ended March 31, 2021, which had an intrinsic value of $1.1 million, and received $18,000 for the 23,606 options exercised during the three months ended March 31, 2020, which had an intrinsic value of $25,000.

The weighted average grant date fair value of options awarded in the three months ended March 31, 2021, was $5.46. Their fair values were estimated using the following assumptions:

Risk-free interest rate		1.02% - 1.07%
Expected term	5.87 - 6.07 Years
Expected volatility		122% - 124%
Dividend yield		—	%

No options were awarded in the three months ended March 31, 2020. 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 March 31,
	2021		2020
Research and development	$	579	$	22
General and administrative		672		74
Total stock-based compensation	$	1,251	$	96

As of March 31, 2021, the unrecognized stock-based compensation cost related to outstanding unvested stock options was $13.3 million, which the Company expects to recognize over an estimated weighted average period of 2.55 years.