Annual report pursuant to Section 13 and 15(d)

Stock-based Compensation

Stock-based Compensation
12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation

Note 14 – Stock-based Compensation


The Company’s Amended and Restated 2013 Equity Compensation Plan (the “Plan”) provides for the granting of incentive stock options, nonqualified stock options, restricted stock units, performance units, and stock purchase rights to eligible employees, officers, non-employee directors and other individual service providers. Options under the Plan may be granted at prices not less than 100% of the fair value of the shares on the date of grant as determined by the Compensation Committee of the Board of Directors. The Compensation Committee determines the period over which the options become exercisable subject to certain restrictions as defined in the Plan, with the current outstanding options generally vesting over three or four years. The term of the options is no longer than ten years. As of December 31, 2022, the Company had 45,603,238 shares of common stock authorized for issuance under the Plan.


With the approval of the Board of Directors and a majority of shareholders, effective May 8, 2014, the Plan was amended and restated. The amendment provides for an automatic increase in the number of shares of common stock available for issuance under the Plan each January (with Board approval), commencing January 1, 2015 in an amount up to four percent (4%) of the total number of shares of common stock outstanding on the preceding December 31st.


The Company recognized stock-based compensation expense (options and restricted share grants) in the following expense categories of its consolidated statements of operations as follows:

Schedule of Recognized Stock-Based Compensation 

    Year Ended December 31,  
    2022     2021  
Research and Development   $ 2,400     $ 1,870  
General and Administrative     2,828       2,422  
Total   $ 5,228     $ 4,292  



The following table contains information about the Company’s stock plan at December 31, 2022:

Schedule of Equity Compensation Plan by Arrangements 

  Awards Reserved for Issuance     Awards Issued & Exercised     Awards Available for Grant  
2013 Equity Compensation Plan (in thousands)     45,603 *     39,420 **     6,183  


* Increased by 8,651 thousand on January 1, 2022, representing 4% of the total number of shares of common stock outstanding on December 31, 2021.
** Includes both stock grants and option grants


Stock Options


The following table summarizes the Company’ stock option activity and related information for the period from January 1, 2021 to December 31, 2022 (options in thousands):

Schedule of Stock Option Activity 

    Number of Options     Weighted Average Exercise Price     Weighted Average Contractual Term in Years  
Outstanding at December 31, 2020     22,551     $ 1.26       6.9  
Granted     10,976       1.11          
Exercised     (1,077 )     0.60          
Forfeited     (2,824 )     1.08          
Expired     (1,442 )     1.98          
Outstanding at December 31, 2021     28,184     $ 1.21       7.2  
Granted     8,509       0.56          
Exercised     (195 )     0.51          
Forfeited     (175 )     0.96          
Expired     (1,584 )     1.06          
Outstanding at December 31, 2022     34,739     $ 1.07       7.1  


The following table summarizes outstanding options at December 31, 2022, by their exercise price (options in thousands):

Range of Exercise Prices   Number Outstanding     Weighted Average Exercise Price Per Share  
$0.41 - $0.69     8,390     $ 0.52  
$0.73 - $0.92     9,828     $ 0.86  
$0.93 - $1.28     8,284     $ 1.08  
$1.36 - $3.32     8,237     $ 1.88  
      34,739     $ 1.07  


As of December 31, 2022, the number of vested shares underlying outstanding options was 19,578,859 at a weighted average exercise price of $1.23. The aggregate intrinsic value of in-the-money options outstanding as of December 31, 2022 was $90. The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price of $0.50 on December 31, 2022, and the exercise price of options, multiplied by the number of options. As of December 31, 2022, there was $9,997 of total unrecognized share-based compensation. Such costs are expected to be recognized over a weighted average period of approximately 2.6 years.



All outstanding options expire ten years from date of grant. Options granted to employees prior to 2018 vest in equal monthly installments over three years. Beginning in 2018, options granted to employees vest over four years, with 25% of the shares vesting on the first annual anniversary of grant and the remaining shares vesting in 36 equal monthly installments over the following 3 years.


Restricted Stock Awards


During the years ended December 31, 2022 and 2021, the Company granted restricted stock awards for 0 and 31,769 shares of common stock, respectively. These awards are typically granted to members of the Board of Directors as payment in lieu of cash fees or as payment to a vendor pursuant to a consulting agreement. The Company values restricted stock awards at the fair market value on the date of grant. The Company recorded the value of these restricted awards as general and administrative expense of $0 and $100 in the consolidated statement of operations for the years ended December 31, 2022 and 2021, respectively.


The Company recognizes compensation expense for restricted stock awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period, with the exception of awards granted subject to a vendor’s consulting agreement, whereby the award vesting period and the service period defined pursuant to the terms of the consulting agreement may be different. The following weighted-average assumptions were used to calculate share-based compensation for the comparative periods presented:


    For the Year Ended December 31,  
    2022     2021  
Volatility     92.1% -98.7 %     98.4% - 101.6 %
Risk-free interest rate     1.57% - 4.32 %     0.47% - 1.28 %
Dividend yield     0.0 %     0.0 %
Expected life     6.0 years       6.0 years   


The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin (SAB) 107 to estimated the expected term of share option grants.


The expected stock price volatility assumption is based the Company’s historical stock price volatility.