Quarterly report pursuant to Section 13 or 15(d)

Stock-based Activity

v3.10.0.1
Stock-based Activity
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Stock-based Activity

Stock-based Compensation

 

We measure stock-based compensation expense for equity-classified awards, principally related to stock options and restricted stock units (“RSUs”), based on the estimated fair value of the award on the date of grant. We recognize the value of the portion of the award that we ultimately expect to vest as stock-based compensation expense over the requisite service period in our condensed consolidated statements of operations.

 

We use the Black-Scholes model to estimate the fair value of stock options granted. The expected term of stock options granted represents the period of time that we expect them to be outstanding. For the three and nine months ended September 30, 2018 and 2017, the following valuation assumptions were used:

 

   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
    2018     2017     2018     2017  
Risk-free interest rate     -       -       2.4 %   1.5 to 2.0
Dividend yield     -       -       0 %     0 %
Expected volatility     -       -       87 %   73 to 85
Expected life of options, in years     -       -       5.5 yrs.     1.4 to 6.0 yrs.  
Weighted-average grant date fair value     -       -     $ 1.42     $ 1.53  

 

 Total estimated stock-based compensation expense, related to all the Company’s stock-based payment awards recognized under ASC 718, “Compensation—Stock Compensation” was comprised of the following:

 

    Three Months Ended     Three Months Ended     Nine Months Ended     Nine Months Ended  
    September 30,     September 30,     September 30,     September 30,  
    2018     2017     2018     2017  
Research and development   $ 96,157     $ 292,523     $ 340,979     $ 989,884  
General and administrative     172,458       721,213       966,183       3,526,488  
Total stock-based compensation expense   $ 268,615     $ 1,013,736     $ 1,307,162     $ 4,516,372  

 

Stock-based Award Activity

 

The following table summarizes the Company’s stock option activity during the nine months ended September 30, 2018:

 

   

Options

Outstanding

   

Weighted-Average

Exercise Price

 
Outstanding at December 31, 2017     953,937     $ 13.97  
Granted     1,186,000       1.99  
Exercised            
Forfeited/cancelled/expired     (319,348 )     6.71  
Outstanding and expected to vest at September 30, 2018     1,820,589     $ 7.44  
Vested and exercisable at September 30, 2018     1,060,093     $ 10.24  

 

The total unrecognized compensation cost related to unvested stock option grants as of September 30, 2018, was $1,549,114 and the weighted average period over which these grants are expected to vest is 1.3 years. The weighted average remaining contractual life of stock options outstanding at September 30, 2018 and 2017 is 9.2 and 9.1 years, respectively.

 

During the first nine months of 2018, the Company granted 1,186,000 options to officers and employees with a weighted average exercise price of $1.99 and vesting over a three-year period with a vesting starting at the one-year anniversary date of the grant date. During the first nine months of 2017, the Company granted 682,230 options to officers and employees with a weighted average exercise price of $7.11 and vesting over a three-year period with vesting starting at the one-year anniversary of the grant date.

 

Stock options granted to employees generally vest over a three-year period with one third of the grants vesting at each one-year anniversary of the grant date.

 

Because the Company had a net operating loss carryforward as of September 30, 2018, no tax benefits for the tax deductions related to stock-based compensation expense were recognized in the Company’s condensed consolidated statements of operations. Additionally, no stock options were exercised in the three and nine months ended September 30, 2018 and 2017.

 

A summary of activity related to restricted stock grants under the Fifth Amended and Restated MabVax Therapeutics Holdings, Inc. 2014 Employee, Director and Consultant Equity Incentive Plan for the nine months ended September 30, 2018 is presented below:

 

    Shares    

Weighted Average

Grant-Date

Fair Value

 
Non-vested at December 31, 2017     832,226     $ 3.88  
Granted            
Vested     (832,226 )     50.26  
Forfeited            
Non-vested at September 30, 2018         $  

 

As of September 30, 2018, there were no non-vested RSUs remaining outstanding.

 

Management Bonus Plan

 

On February 21, 2018, the compensation committee of the Board of Directors reviewed 2017 results and concluded that the year’s performance, relative to the objectives set at the beginning of the year, did not merit any bonus payment. The compensation committee also determined that management base salaries would currently remain unchanged from 2017 levels.

 

Common stock reserved for future issuance

 

Common stock reserved for future issuance consists of the following at September 30, 2018:

 

Common stock reserved for conversion of preferred stock     7,869,862  
Warrants to purchase common stock     1,221,935  
Common stock options outstanding     1,820,589  
Authorized for future grant or issuance under the Stock Plan     646,059  
      Total     11,558,445