Quarterly report pursuant to Section 13 or 15(d)

STOCK BASED AWARDS

v3.23.2
STOCK BASED AWARDS
6 Months Ended
Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]  
STOCK BASED AWARDS

13. STOCK BASED 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.

In accordance with the terms of the 2014 Plan, and pursuant to the annual evergreen provision contained in 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 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 reserve of 1,144,567 shares and 558,671 shares available for future grants. As of June 30, 2022, there were 425,217 shares available for future grants.

 

In accordance with the terms of the 2014 Plan, and pursuant to the annual evergreen provision contained in 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, 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 reserve of 1,436,558 shares and 741,870 shares available for future grants. As of June 30, 2023, there were 555,704 shares available for future grants.

 

Share-based Compensation Expense

 

In connection with all stock-based payment awards, total stock-based compensation expense, net of estimated forfeitures, recognized in the condensed consolidated statements of operations and comprehensive loss was as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

$

96,096

 

 

$

147,626

 

 

$

190,018

 

 

$

323,844

 

General and administrative expenses

 

 

727,279

 

 

 

1,365,463

 

 

 

1,659,736

 

 

 

2,780,991

 

Total stock-based compensation

 

$

823,375

 

 

$

1,513,089

 

 

$

1,849,754

 

 

$

3,104,835

 

 

The total stock-based compensation expense recognized by award type was as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

$

819,168

 

 

$

1,513,089

 

 

$

1,842,909

 

 

$

3,104,835

 

Restricted stock units

 

 

4,207

 

 

 

 

 

 

6,845

 

 

 

 

Total stock-based compensation

 

$

823,375

 

 

$

1,513,089

 

 

$

1,849,754

 

 

$

3,104,835

 

 

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. 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 to employees were as follows:

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Risk-free interest rate

 

 

3.81

%

 

 

1.81

%

Expected dividend yield

 

 

0

%

 

 

0

%

Expected term in years

 

6.25

 

 

 

6.25

 

Expected volatility

 

 

101.33

%

 

 

97.76

%

Estimated forfeiture rate

 

 

15.56

%

 

 

12.37

%

 

A summary of option activity for the six months ended June 30, 2023 and is presented below:

 

Options

 

Shares

 

 

Weighted
 Average
Exercise
 Price

 

 

Weighted Average
 Remaining Contractual
Term in Years

 

 

Aggregate
Intrinsic
Value

 

Outstanding at December 31, 2022

 

 

617,996

 

 

$

88.99

 

 

 

 

 

 

 

Granted

 

 

285,733

 

 

 

5.14

 

 

 

 

 

 

 

Exercised

 

 

(43,836

)

 

 

0.85

 

 

 

 

 

 

 

Forfeited or canceled

 

 

(120,909

)

 

 

67.78

 

 

 

 

 

 

 

Outstanding at June 30, 2023

 

 

738,984

 

 

$

64.97

 

 

 

7.24

 

 

$

20,769,766

 

Vested at June 30, 2023

 

 

388,412

 

 

$

106.91

 

 

 

5.57

 

 

$

5,252,474

 

Vested and expected to vest at June 30, 2023

 

 

671,776

 

 

$

70.47

 

 

 

7.03

 

 

$

17,407,765

 

 

The weighted average grant date fair value of options granted during the six months ended June 30, 2023 and 2022 was $4.20 and $10.80 per share, respectively. The aggregate intrinsic value of options exercised during the six months ended June 30, 2023 and 2022 was approximately $92,689 and $0, respectively. As of June 30, 2023, there was approximately $4,300,982 of total unrecognized compensation expense, related to non-vested share-based option compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a period of 1.79 years as of June 30, 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.

 

A summary of RSU activity for the six months ended June 30, 2023 and is presented below:

 

RSU's

 

Number of Shares Underlying RSUs

 

 

Weighted
 Average
Grant Date Fair Value

 

Unvested at December 31, 2022

 

 

 

 

$

 

Granted

 

 

25,659

 

 

 

4.63

 

Forfeited

 

 

(4,317

)

 

 

4.26

 

Vested

 

 

 

 

 

 

Unvested at June 30, 2023

 

 

21,342

 

 

$

4.71

 

 

As of June 30, 2023, there was $75,498 of unrecognized compensation costs related to unvested RSUs, which are expected to be recognized over a weighted average period of 3.65 years.