Stock-Based Compensation

3 Months Ended

Mar. 31, 2025

5. Stock-Based Compensation

Following is the stock-based compensation expense related to common stock options, restricted common stock, common stock warrants and deferred stock units:



	Three Months Ended March 31,
	2025		2024
Research and development	$	190	$	323
General and administrative		278		281
Total stock-based compensation expense	$	468	$	604

The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2024 through March 31, 2025:



	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2024		6,854,758		$	2.39
Granted		1,211,000			1.23
Exercised
Options forfeited/cancelled		(66,000	)		(3.45	)
Outstanding, March 31, 2025		7,999,758		$	2.20

As of March 31, 2025, there was $1,497,000 of unrecognized compensation related to 1,852,504 unvested options, which is expected to be recognized over a weighted–average period of approximately 0.9 years. The weighted-average grant date fair value for options granted during the three months ended March 31, 2025 was $0.87. The Company granted 1,211,000 stock options during the three months ended March 31, 2025.

The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:



	Three Months Ended March 31,		Three Months Ended March 31,
	2025		2024
Risk-free interest rate	4.48	%	4.02	%
Expected life of the options	5.6 years		5.5 years
Expected volatility of the underlying stock	83	%	78	%
Expected dividend rate	0	%	0	%

In January 2025, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2025. A total of 32,250 shares of restricted stock valued at approximately $40,000 is being amortized to expense on a straight-line basis until December 31, 2025 when the stock vests in full. In January 2024, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2024. A total of 23,256 shares of restricted stock valued at approximately $40,000 is being amortized to expense on a straight-line basis until December 31, 2024 when the stock vests in full.

During the three months ended March 31, 2025, the Company issued 504,000 restricted stock units to its employees valued at $620,000 at the date of grant. These restricted stock units will vest 100% on the earlier of entering into a partnership or December 31, 2025. The Company believes that is probable that the vesting condition will be met and is amortizing the restricted stock unit expense ratably in 2025. The amount of expense recorded during the quarter ended March 31, 2025 was $124,000.

In September 2020, the Company entered into an employment agreement with its new Chief Executive Officer whereby 20% of his base salary and performance bonuses will be paid in cash, and 80% will be paid in the form of deferred stock units (“DSUs”) through December 31, 2022 in accordance with the terms and subject to the provisions set forth in the DSU Agreement. DSUs credited to Mr. Lewis as of any date shall be fully vested and nonforfeitable at all times. Pursuant to an amendment to the DSU Agreement in July 2022, the Company shall issue the shares earned through December 31, 2022 underlying the outstanding whole number of DSUs credited to Mr. Lewis as follows: twenty five percent shall be issued on March 1, 2023, fifty percent shall be issued on March 1, 2024 and twenty five percent shall be issued on September 1, 2028. Additionally, a 2023 DSU Agreement was executed in July 2022, whereby Mr. Lewis would continue to receive 20% of salary in cash and 80% in DSUs through December 31, 2023. The shares under the 2023 DSU Agreement are to be issued fifty percent on March 1, 2025 and fifty percent on January 5, 2026.

On March 1, 2025, fifty percent of the DSU’s were issued to Mr. Lewis in accordance with the 2023 DSU Agreement. A total of 137,563 shares were due to be issued; however, 56,420 shares were withheld to cover income tax withholding of $88,579 resulting in 81,144 shares actually issued.

On March 1, 2024, fifty percent of the DSU’s were issued to Mr. Lewis in accordance with the DSU Agreement. A total of 367,800 shares were due to be issued; however, 153,288 shares were withheld to cover income tax withholding of $300,445 resulting in 214,512 shares actually issued.

There is no unrecognized compensation expense related to the DSUs.