Annual report pursuant to Section 13 and 15(d)

STOCK OPTIONS

v3.22.4
STOCK OPTIONS
12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
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, 2022, pursuant to an annual evergreen provision contained in the 2014 Plan, the number of shares reserved for future grants was increased by 292,205 shares, which was seven percent (7%) of the outstanding shares of common stock on December 31, 2021. As of January 1, 2022 there was a total of 1,144,567 shares reserved for issuance under the 2014 Plan and there were 558,671 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, 2023, the number of shares of common stock available for issuance under the 2014 Plan increased by 291,991 shares, such amount being seven percent (7%) of the outstanding shares of common stock on December 31, 2022 (see Note 18). As of January 1, 2023, the 2014 Plan had a total reserve of 1,436,558 shares and there were 741,870 shares available for future grants.

 

Share-based Compensation

 

For stock options issued and outstanding for the years ended December 31, 2022 and 2021, the Company recorded non-cash, stock-based compensation expense of $5,719,637 and $9,480,373, respectively, net of estimated forfeitures.

 

 

 

 

Twelve Months Ended December 31,

 

 

 

2022

 

2021

 

 

 

 

 

 

Research and development expenses

 

 

$577,472

 

$2,969,347

General and administrative expenses

 

 

5,142,165

 

6,511,026

Total stock-based compensation

 

 

$5,719,637

 

$9,480,373

 

The fair value of each option award for employees and non-employees is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table, except for the expected term for non-employees as noted in the following. 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:

 

 

 

Twelve Months Ended December 31,

 

 

 

2022

 

 

2021

 

Risk free interest rate

 

 

1.99

%

 

 

0.76

%

Expected dividend yield

 

 

0

%

 

 

0

%

Expected term in years

 

 

6.25

 

 

 

6.23

 

Expected volatility

 

 

98.08

%

 

 

102.96

%

Estimated forfeiture rate

 

 

12.43

%

 

 

9.12

%

 

 

A summary of option activity for years ended December 31, 2022 and 2021 is presented below:

 

Options

 

Shares

 

Weighted
Average
Exercise
Price

 

Weighted
Average
Remaining
Contractual
Term in
Years

 

Intrinsic
Value

Outstanding at December 31, 2020

 

476,321

 

 

154.50

 

 

 

 

 

Granted

 

245,793

 

 

70.80

 

 

 

 

 

Exercised

 

(27,953)

 

 

33.90

 

 

 

 

 

Forfeited or canceled

 

(182,655)

 

 

151.20

 

 

 

 

 

Expired

 

(636)

 

 

209.10

 

 

 

 

 

Outstanding at December 31, 2021

 

510,870

 

$

121.90

 

 

 

 

 

Granted

 

185,169

 

 

12.90

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

Forfeited or canceled

 

(56,019)

 

 

107.13

 

 

 

 

 

Expired

 

(22,024)

 

 

166.53

 

 

 

 

 

Outstanding at December 31,
2022

 

617,996

 

$

88.99

 

6.78

 

$

11,195,964

Exercisable at December 31,
2022

 

358,611

 

$

125.97

 

5.37

 

$

3,177,014

Vested and expected to vest at December 31, 2022

 

584,143

 

$

92.55

 

6.66

 

$

9,969,530

 

The weighted average grant-date fair value of options granted during the years ended December 31, 2022 and 2021 was $10.20 and $57.30 per share, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was approximately $0 and $1,769,714, respectively. As of December 31, 2022, there was approximately $6,302,350 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 2.05 years at December 31, 2022.

 

As summary of non-vested stock options for the years ended December 31, 2022 and 2021 is presented below:

 

Options

 

Shares

 

 

Weighted
Average
Fair Value

 

Non-vested December 31, 2020

 

 

144,576

 

 

$

 

124.20

 

Granted

 

 

245,793

 

 

 

 

57.30

 

Vested

 

 

(74,731

)

 

 

 

120.60

 

Forfeited

 

 

(105,135

)

 

 

 

84.00

 

Non-vested at December 31, 2021

 

 

210,503

 

 

$

 

67.80

 

Granted

 

 

185,169

 

 

 

 

10.19

 

Vested

 

 

(107,269

)

 

 

 

67.54

 

Forfeited

 

 

(29,019

)

 

 

 

43.06

 

Non-vested at December 31, 2022

 

 

259,384

 

 

$

 

29.59