Annual report pursuant to Section 13 and 15(d)

STOCK OPTIONS

v3.22.0.1
STOCK OPTIONS
12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
STOCK OPTIONS
14.
STOCK OPTIONS

 

In April 2014, the Company adopted the Corbus Pharmaceuticals Holdings, Inc. 2014 Equity Incentive Plan (the “2014 Plan”). Pursuant to the 2014 Plan, the Company’s Board of Directors may grant incentive and nonqualified stock options and restricted stock to employees, officers, directors, consultants and advisors.

 

Pursuant to the terms of an annual evergreen provision in the 2014 Plan, the number of shares of common stock available for issuance under the 2014 Plan shall automatically increase on January 1 of each year by at least seven percent (7%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, or, pursuant to the terms of the 2014 Plan, in any year, the Board of Directors may determine that such increase will provide for a lesser number of shares.

 

On January 1, 2021, pursuant to an annual evergreen provision contained in the 2014 Plan, the number of shares reserved for future grants was increased by 2,500,000 shares, which was less than seven percent (7%) of the outstanding shares of common stock on December 31, 2020. As of January 1, 2021 there was a total of 25,570,842 shares reserved for issuance under the 2014 Plan and there were 9,869,051 shares available for future grants. Options issued under the 2014 Plan generally vest over 4 years from the date of grant in multiple tranches and are exercisable for up to 10 years from the date of issuance.

 

In accordance with the terms of the 2014 Plan, effective as of January 1, 2022, the number of shares of common stock available for issuance under the 2014 Plan increased by 8,766,162 shares, which was seven percent (7%) of the outstanding shares of common stock on December 31, 2021 (see Note 16). As of January 1, 2022, the 2014 Plan had a total reserve of 34,337,004 shares and there were 16,760,151 shares available for future grants.

 

Share-based Compensation

 

For stock options issued and outstanding for the years ended December 31, 2021 and 2020, the Company recorded non-cash, stock-based compensation expense of $9,480,373 and $12,458,229, respectively, net of estimated forfeitures.

 

 

 

Twelve Months Ended December 31,

 

 

2021

 

2020

 

 

 

 

 

Research and development expenses

 

$2,969,347

 

$5,336,472

General and administrative expenses

 

6,511,026

 

7,121,757

Total stock-based compensation

 

$9,480,373

 

$12,458,229

 

The fair value of each option award for employees is estimated on the date of grant and for non-employees is estimated at the end of each reporting period until vested using the Black-Scholes option pricing model that uses the assumptions noted in the following table. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the financial statements, to estimate option exercises and employee terminations in order to estimate its forfeiture rate. The expected term of options granted under the 2014 Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history, and is 6.25 years based on the average between the vesting period and the contractual life of the option. For non-employee options, the expected term is the contractual term. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option.

 

The weighted average assumptions used principally in determining the fair value of options granted were as follows:

 

 

 

2021

 

 

2020

 

Risk free interest rate

 

 

0.76

%

 

 

0.59

%

Expected dividend yield

 

 

0

%

 

 

0

%

Expected term in years

 

 

6.23

 

 

 

6.25

 

Expected volatility

 

 

102.96

%

 

 

83.56

%

Estimated forfeiture rate

 

 

9.12

%

 

 

6.02

%

 

 

 

A summary of option activity for years ended December 31, 2021 and 2020 is presented below:

 

Options

 

Shares

 

Weighted
Average
Exercise
Price

 

Weighted
Average
Remaining
Contractual
Term in
Years

 

Intrinsic
Value

Outstanding at December 31, 2019

 

13,245,366

 

$

5.19

 

 

 

 

 

Granted

 

4,536,600

 

 

5.00

 

 

 

 

 

Exercised

 

  (427,611)

 

 

1.77

 

 

 

 

 

Forfeited

 

  (3,064,712)

 

 

5.60

 

 

 

 

 

Outstanding at December 31, 2020

 

14,289,643

 

 

5.15

 

 

 

 

 

Granted

 

7,373,800

 

 

2.36

 

 

 

 

 

Exercised

 

  (838,600)

 

 

1.13

 

 

 

 

 

Forfeited

 

  (5,479,653)

 

 

5.04

 

 

 

 

 

Expired

 

  (19,085)

 

 

6.97

 

 

 

 

 

Outstanding at December 31, 2021

 

15,326,105

 

$

4.06

 

6.75

 

$

3,529,258

Exercisable at December 31, 2021

 

9,011,000

 

$

4.87

 

5.22

 

$

2,691,592

Vested and expected to vest at December 31, 2021

 

14,652,110

 

$

4.14

 

6.64

 

$

3,340,598

 

The weighted average grant-date fair value of options granted during the years ended December 31, 2021 and 2020 was $1.91 and $3.53 per share, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was approximately $1,769,714 and $1,235,676, respectively. As of December 31, 2021, there was approximately $10,825,375 of total unrecognized compensation expense, related to non-vested share-based compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a period of 2.47 years at December 31, 2021.

 

As summary of non-vested stock options for the years ended December 31, 2021 and 2020 is presented below:

 

Options

 

Shares

 

 

Weighted
Average
Fair Value

 

Nonvested December 31, 2019

 

 

5,409,272

 

 

$

 

5.21

 

Granted

 

 

4,536,600

 

 

 

 

3.53

 

Vested

 

 

(2,720,493

)

 

 

 

5.34

 

Forfeited

 

 

(2,888,085

)

 

 

 

4.11

 

Nonvested December 31, 2020

 

 

4,337,294

 

 

$

 

4.14

 

Granted

 

 

7,373,800

 

 

 

 

1.91

 

Vested

 

 

(2,241,925

)

 

 

 

4.02

 

Forfeited

 

 

(3,154,064

)

 

 

 

2.80

 

Non-vested at December 31, 2021

 

 

6,315,105

 

 

$

 

2.26