14. STOCK-BASED COMPENSATION AWARDS

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 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 may determine that such increase will provide for a lesser number of shares.

On January 1, 2023, pursuant to an annual evergreen provision contained in the 2014 Plan, the number of shares reserved for future grants was increased by 291,991 shares, which was seven percent (7%) of the outstanding shares of common stock on December 31, 2022. As of January 1, 2023 there was a total of 1,436,558 shares reserved for issuance under the 2014 Plan and there were 741,870 shares available for future grants. Stock 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. Restricted stock units issued under the 2014 Plan generally have equal annual vesting over a 4 year period.

In accordance with the terms of the 2014 Plan, effective as of January 1, 2024, the number of shares of common stock available for issuance under the 2014 Plan increased by 309,658 shares, such amount being seven percent (7%) of the outstanding shares of common stock on December 31, 2023 (see Note 17). As of January 1, 2024, the 2014 Plan had a total reserve of 1,746,215 shares and there were 899,015 shares available for future grants.

Stock-based Compensation

In connection with all stock-based compensation awards, total non-cash, stock-based compensation expense, net of estimated forfeitures, recognized in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022 was as follows:

Stock Options

The fair value of each option award 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 paragraph. 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 employee 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 Company has elected to utilize the contractual term as the expected term. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with that used to value the option.

The weighted average grant-date fair value of stock options granted during the years ended December 31, 2023 and 2022 was $4.20 and $10.20 per share, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2023 and 2022 was $92,689 and $0, respectively. As of December 31, 2023, there was approximately $2,769,000 of total unrecognized compensation expense, related to non-vested stock-based compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a period of 1.49 years at December 31, 2023.

Restricted Stock Units

A RSU represents the right to receive one share of our common stock upon vesting of the RSU. The fair value of each RSU is based on the closing price of our common stock on the date of grant. We grant RSUs with service conditions that vest in four equal annual installments provided that the employee remains employed with us on the vesting date.

As of December 31, 2023, there was $62,000 of unrecognized compensation costs related to unvested RSUs, which are expected to be recognized over a weighted average period of 3.22 years.