Stock-based Compensation |
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| Stock-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based Compensation |
Stock-based
compensation expense was included in general and administrative and research and development costs as follows in the accompanying condensed consolidated statements of comprehensive loss for the three and nine month periods indicated below
(in thousands):
Ocuphire Stock Options
Inducement
Plan
On February 22, 2021, the Company adopted the
Ocuphire Pharma, Inc. Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved 325,258 shares of its
common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the
meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.
2020 Equity Incentive Plan
The stockholders of the Company approved the 2020
Equity Incentive Plan (the “2020 Plan”) for stock-based awards. The 2020 Plan became effective on November 5, 2020. Under the 2020 Plan, (i) 1,000,000
new shares of common stock were reserved for issuance and (ii) up to 70,325 additional shares of common stock may be issued,
consisting of (A) shares that remain available for the issuance of awards under prior equity plans and (B) shares of common stock subject to outstanding stock options or other awards covered by prior equity plans that have been cancelled
or expire on or after the date that the 2020 Plan became effective. The 2020 Plan permits the grant of incentive and nonstatutory stock options, appreciation rights, restricted stock, restricted stock units, performance stock and net loss
awards, and other stock-based awards.
2018 Equity Incentive Plan
Prior to the 2020 Plan, the Company had adopted a 2018
Equity Incentive Plan (the “2018 Plan”) in April 2018 under which 1,175,000 shares of the Company’s common stock were reserved
for issuance to employees, directors and consultants. Upon the effective date of the 2020 Plan, no additional shares were
available for issuance under the 2018 Plan.
2020 Plan
Evergreen Provision
Under the 2020 Plan, the shares reserved automatically
increase on January 1 of each year, for a period of not more than ten years from the date the 2020 Plan is approved by the
stockholders of the Company, commencing on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to 5%
of the shares of common stock outstanding as of December 31 of the preceding calendar year. Notwithstanding the foregoing, the Board of Directors may act prior to January 1 of a given year to provide that there will be no January 1
increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding sentence. On January 1, 2022, 942,291 shares were added to the 2020 Plan as a result of the evergreen provision.
General
During the three and nine months ended September 30, 2022, 167,000 and 893,305 stock options were granted to
directors, officers, employees and consultants, respectively, generally vesting over a ten (10) to forty-eight (48) month period. During the three and nine months ended September 30, 2021, 128,000 and 387,800 stock options were granted to newly-hired
consultants and employees, respectively, generally vesting over a six (6) to forty-eight (48) month period. The Company recognized $394,000 and
$452,000 in stock-based compensation expense related to stock options during the three months ended September 30, 2022 and 2021, respectively,
and $1,229,000 and $1,331,000
during the nine months ended September
30, 2022 and 2021, respectively. During the nine months ended September
30, 2022, 24,309 stock options were exercised with an intrinsic value of $59,000. During the three and nine months ended September 30, 2021, 66,056 and
73,442 stock options were exercised, respectively, with an intrinsic value of $271,000 and $345,000, respectively.
The weighted average fair value per share of options granted during the
three and nine months ended September 30, 2022 was $1.65 and $2.06, respectively.
The weighted average fair value per share of options granted during the three and nine months ended September 30, 2021 was $3.69 and
$4.47, respectively. The Company measures the fair value of stock options with service-based and performance-based vesting
criteria to employees, directors, consultants and directors on the date of grant using the Black-Scholes option pricing model. The Company does not have history to support a calculation of volatility and expected term. As such, the
Company has used a weighted-average volatility considering the volatilities of several guideline companies.
For purposes of identifying similar entities, the
Company considered characteristics such as industry, length of trading history, and stage of life cycle. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The average
expected life of the options was based on the contractual term for agreements that allow for exercise of vested options through the end of the contractual term upon termination of continuous service, and for all other agreements, was
based on the midpoint between the vesting date and the end of the contractual term according to the “simplified method” as described in Staff Accounting Bulletin 110. The risk-free interest rate is determined by reference to implied
yields available from U.S. Treasury securities with a remaining term equal to the expected life assumed at the date of grant. The Company records forfeitures when they occur.
The weighted-average assumptions used
in the Black-Scholes option pricing model are as follows during the three and nine months ended September 30, 2022 and 2021:
During the three and nine months ended September 30, 2022, 89,623 and 356,726 stock options vested, respectively. During the three and nine months ended September 30, 2021, 95,949 and 328,893 stock options vested, respectively.
During the three and nine months ended September
30, 2022, 13,500 and 27,788 options were forfeited, respectively. During the nine months ended September 30, 2021, 25,558 options were forfeited. As of September 30, 2022, 892,920
shares were available for future issuance under the 2020 Plan and Inducement Plan. No shares were available for future
issuance under the 2018 Plan.
Unrecognized
stock-based compensation cost was $3.0 million as of September 30, 2022. The unrecognized stock-based expense is expected to be recognized over a weighted average
period of 1.3 years.
Ocuphire Restricted Stock Awards
The Company did not grant any restricted stock awards (“RSAs”) during any of the periods
presented. The RSAs granted in previous periods were subject to various vesting schedules. During the nine months ended September 30, 2022 and 2021, zero
and 40,000 RSAs vested, respectively, and no RSAs were forfeited during the periods presented. The stock-based compensation expense attributed to the RSAs during the nine months ended September 30, 2022 and 2021 was zero and $22,000, respectively.
Common Stock Issued for Services
The Company granted stock for services in the amount of 52,225 common shares during the three months ended September 30, 2022 to four board members who elected to receive their board retainers in the form of stock for services performed as compared to 5,047 shares of common stock granted for services to two
board members during the three months ended September 30, 2021. During the nine months ended September 30, 2022 and 2021, 74,396
and 14,444 common shares were issued to board members for services, respectively. The stock-based compensation related to
these services amounted to $99,000 and $26,000 during the three months ended September 30, 2022 and 2021, respectively, and $154,000
and $82,000 during the nine months ended September 30, 2022 and 2021, respectively.
Former
Rexahn Options
None of the unexercised and vested options to purchase Common
Stock granted under the Rexahn Pharmaceuticals Stock Option Plan, as amended (the “Rexahn 2003 Plan”) remained outstanding as of September 30, 2022. All of the previously outstanding Rexahn options expired unexercised.
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