Stock Incentive Plan | 10. Stock Incentive Plan On October 31, 2017, the Company adopted the 2017 Stock Option and Incentive Plan (“2017 Plan”). Upon the adoption of the 2017 Plan, no further grants would be made under the 2011 Stock Incentive Plan (“2011 Plan”). The 2017 Plan initially provided for the grant of awards for 2,038,021 shares of common stock. In addition to the shares available for grant under the 2017 Plan, shares underlying any awards outstanding under the 2011 Plan as of the October 31, 2017 that are cancelled, forfeited or otherwise terminated without being exercised will be available for future grant under the 2017 Plan. The 2017 Plan also provides that an additional number of shares will automatically be added to the shares authorized for issuance under the 2017 Plan on January 1 of each year. The number of shares added each year will be equal to the lesser of: (i) 4% of the outstanding shares on the immediately preceding December 31 or (ii) such amount as determined by the Compensation Committee of the Board of Directors. All of the Company’s employees, officers, directors, consultants and advisors are eligible to be granted options, restricted stock units (“RSUs”), and other share-based awards under the terms of the 2017 Plan. As of June 30, 2021, 429,556 shares of common stock were available for future grant under the 2017 Plan. On January 22, 2021, the Company adopted the 2021 Inducement Equity Plan (“2021 Plan”). The 2021 Plan provides for the grant of awards for 1,600,000 shares of common stock. The purpose of the 2021 plan is to enable the Company to grant equity awards to induce highly qualified prospective officers and employees who are not currently employed by the Company to accept employment and provide them with an equity interest in the Company. The Company is utilizing the 2021 Plan for awards the Company may make without stockholder approval as an inducement pursuant to Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market, Inc. As of June 30, 2021, 851,000 shares of common stock were available for future grant under the 2021 Plan. All stock option grants are nonstatutory stock options except option grants to employees (including officers and directors) intended to qualify as incentive stock options under the Internal Revenue Code of 1986, as amended. Incentive stock options may not be granted at less than the fair market value of the Company’s common stock on the date of grant, as determined in good faith by the Board of Directors at its sole discretion. Nonqualified stock options may be granted at an exercise price established by the Board of Directors at its sole discretion (which has not been less than fair market value on the date of grant) and the vesting periods may vary. Vesting periods are generally four years and are determined by the Board of Directors or a delegated subcommittee. Stock options become exercisable as they vest. Options granted under both the 2011 Plan and 2017 Plan expire no more than 10 years Stock-based compensation expense included in the Company’s statements of operations and comprehensive loss is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 303 $ 281 $ 550 $ 709 General and administrative 657 717 1,277 1,324 Total $ 960 $ 998 $ 1,827 $ 2,033 The fair value of each stock option granted to employees and directors during the three and six months ended June 30, 2021 was estimated on the date of grant using the Black-Scholes option-pricing model, with the following range of assumptions: Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Risk-free interest rate 0.9%-1.4% 0.4%-1.4% Expected dividend yield —% —% Expected term (in years) 5.4-7.0 5.0-7.0 Expected volatility 93%-94% 93%-94% The Company did not grant any stock options during the three and six months ended June 30, 2020. A summary of the stock option activity under the 2011, 2017 and 2021 Plans is as follows: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2020 4,110,691 $ 3.89 7.3 $ 124 Granted 3,243,350 1.89 Exercised — — Cancelled (262,284 ) 6.95 Outstanding at June 30, 2021 7,091,757 $ 2.86 8.1 $ 179 Exercisable at June 30, 2021 2,752,894 $ 3.70 6.2 $ 130 As of June 30, 2021, total unrecognized stock-based compensation expense relating to unvested stock options was $7.1 million. This amount is expected to be recognized over a weighted-average period of 2.8 years. Restricted Stock Units (RSUs) In December 2020, the Company awarded 620,277 RSUs to employees of the Company. 248,111 shares of common stock were issued on May 10, 2021 upon vesting of a portion of the RSUs. The remaining RSUs vest on November 10, 2021. The RSUs are generally forfeited if the employment relationship terminates with the Company prior to vesting. For the three and six months ended June 30, 2021, the Company recognized $0.2 million and $0.4 million of stock-based compensation expense, respectively, related to these awards. As of June 30, 2021, the total remaining unrecognized compensation cost related to all unvested RSUs amounted to $0.3 million, which is expected to be recognized during the remainder of 2021. A summary of the status of nonvested RSUs as of June 30, 2021 and the changes during the six months then ended are presented below: Shares Weighted-Average Grant Date Fair Value Nonvested at December 31, 2020 620,277 $ 1.29 Granted — — Vested (248,111 ) 1.29 Forfeited — — Nonvested at June 30, 2021 372,166 $ 1.29 |