Marker Therapeutics, Inc. Stock Compensation Disclosure
NOTE 11: STOCK BASED COMPENSATION
Stock Options
On May 19, 2020, the Board adopted the 2020 Equity Incentive Plan (“2020 Equity Incentive Plan”) which replaced the 2014 Omnibus Stock Option Plan. The 2020 Plan was further amended effective May 2022 to increase the number of shares of common stock authorized for issuance under the plan by 850,000 shares. The 2020 Plan allows for grants of stock options, restricted shares, stock bonuses and other equity-based awards to employees and non-employee directors of the Company. Awards under the 2020 Plan may be at prices and for terms as determined by the Company’s board of directors and may have vesting requirements as determined by the Board, provided that the exercise price for any stock option must be at least equal to the fair market value (as defined in the 2020 Plan) of a share of the stock on the grant date. Once granted, the exercise price of an option may not be reduced without the approval of the Company’s stockholders, other than under certain limited circumstances such as a stock split or take any other action with respect to a stock option that would be treated as a repricing under the rules and regulations of the Nasdaq Stock Exchange.
Options granted under the 2020 Plan have a maximum term of ten years from the date of grant and generally vest over four years.
2023 Equity Incentive Awards
On February 27, 2023, pursuant to the Company’s 2020 Equity Incentive Plan, the compensation committee of the Company’s board of directors approved a total of 316,855 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers and management team. Each option award was granted with an exercise price of $2.14 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 27, 2023, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date. Additionally, on February 27, 2023, the compensation committee of the Company’s board of directors approved a total of 87,677 options to purchase the Company’s common stock to non-executive employees and management team of the Company as equity-based incentive awards. Each option award was granted with an exercise price of $2.14 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 27, 2023, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such employee’s continued service on the applicable vesting date.
The above awards were in addition to 7,000 stock option awards issued during the three months ended March 31, 2023 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $2.769 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on January 3, 2023, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.
On May 10, 2023, the Company’s board of directors approved a one-time share option grant of 100,000 shares of common stock to Dr. Vera for his appointment as the Company’s Chief Executive Officer. The option has a term of ten years and will vest in equal annual
installments on May 10, 2024, May 10, 2025, May 10, 2026, and May 10, 2027, subject to Mr. Vera’s continued service to the Company as of the applicable vesting date. Each option award was granted with an exercise price of $1.42 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on May 10, 2023.
On June 6, 2023, pursuant to the Company’s Non-Employee Director Compensation Policy, which had previously been approved by the Company’s board of directors, a total of 32,000 stock option awards were issued to independent members of the board of directors of the Company. Each option award was granted with an exercise price of $1.72 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on June 6, 2023. Each Option award will vest in one year subject to the director’s continuance of service through June 6, 2024.
For the year ended December 31, 2023, the Company recorded incremental stock-based compensation expense of approximately $0.3 million pertaining to the modification of stock options in connection with the termination of certain employees that were hired by Cell Ready or transitioned as independent consultants. The modification provided for an acceleration of unvested options, resulting in a change in compensation expense that was immediately recognized. $0.2 million is reflected in loss from discontinued operations.
2022 Equity Incentive Awards
On February 17, 2022, pursuant to the Company’s 2020 Equity Incentive Plan, the compensation committee of the Company’s board of directors approved a total of 125,000 options to purchase the Company’s common stock as equity-based incentive awards to the Company’s executive officers. Each option award was granted with an exercise price of $4.60 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such executive officer’s continued service on the applicable vesting date. Additionally, on February 17, 2022, the compensation committee of the Company’s board of directors approved a total of 39,500 options to purchase the Company’s common stock to non-executive employees of the Company as equity-based incentive awards. Each option award was granted with an exercise price of $4.60 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on February 17, 2022, with the option award vesting in 48 equal monthly installments over a four-year period, subject to such employee’s continued service on the applicable vesting date.
The above awards were in addition to 17,500 stock option awards issued during the three months ended March 31, 2022 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $10.00 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on January 3, 2022, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.
21,000 stock option awards were issued during the three months ended June 30, 2022 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $4.30 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on April 1, 2022, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.
10,000 stock option awards were issued during the three months ended September 30, 2022 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $3.50 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on July 1, 2022, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.
Additionally, 7,000 stock option awards were issued during the three months ended December 31, 2022 to new employees upon their commencement of employment with the Company. Each option award was granted with an exercise price of $3.73 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on October 3, 2022, with 25% of the option award vesting in one year and the remaining 75% vesting in 36 equal monthly installments thereafter over a three-year period, subject to such employee’s continued service on the applicable vesting date.
Also, pursuant to the Company’s Non-Employee Director Compensation Policy, which had previously been approved by the Company’s board of directors, 40,000 stock option awards were issued during the year ended December 31, 2022 to independent members of the
board of directors of the Company. Each option award was granted on May 24, 2022 with an exercise price of $3.377 per share, the closing price of the Company’s common stock on the Nasdaq Global Market on May 24, 2022. Each option award vested over one year subject to the director’s continuance of service through May 24, 2023.
As of December 31, 2023, approximately 1.1 million shares of common stock are available to be issued under the 2020 Plan.
Stock Options
A summary of the Company’s stock option activity for the years ended December 31, 2023 and December 31, 2022, is as follows:
|
|
| Weighted Average | |||||||
Remaining | ||||||||||
Weighted Average | Contractual | |||||||||
| Number of Shares |
| Exercise Price |
| Total Intrinsic Value |
| Life (in years) | |||
Outstanding as of January 1, 2022 |
| 768,623 | $ | 54.69 | $ | — | 7.7 | |||
Granted |
| 260,000 | 4.68 | — | 7.8 | |||||
Canceled/Expired | (142,450) | 36.78 | — | — | ||||||
Outstanding as of December 31, 2022 |
| 886,173 | 42.90 | — | 7.3 | |||||
Granted |
| 544,532 | 1.99 | — | 5.6 | |||||
Exercised |
| (27,518) |
| 3.29 |
| — | — | |||
Canceled/Expired |
| (665,292) |
| 30.41 |
| — | — | |||
Outstanding as of December 31, 2023 |
| 737,895 | $ | 25.42 | $ | 1,317,000 | 7.6 | |||
Options vested and exercisable |
| 404,343 | $ | 43.53 | $ | 244,000 | 6.6 | |||
The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans. The weighted average assumptions used in calculating the fair values of stock options that were granted during the years ended December 31, 2023 and 2022, respectively, were as follows:
For the Years Ended | |||||||
December 31, | |||||||
| 2023 |
| 2022 | ||||
Exercise price | $ | 1.99 | $ | 4.70 | |||
Expected term (years) |
| 6.0 |
| 5.9 | |||
Expected stock price volatility |
| 91 | % |
| 85 | % | |
Risk-free rate of interest |
| 4 | % |
| 2 | % | |
Expected dividend rate |
| 0 | % |
| 0 | % | |
The following table sets forth stock-based compensation expenses recorded during the respective periods:
| For the Years Ended | |||||
December 31, | ||||||
| 2023 |
| 2022 | |||
Stock Compensation expenses: |
|
|
|
| ||
Research and development | $ | 338,000 | $ | 783,000 | ||
General and administrative | 520,000 | 2,522,000 | ||||
Stock compensation in continuing operations | 858,000 | 3,305,000 | ||||
Stock compensation in discontinued operations |
| 725,000 |
| 2,039,000 | ||
Total stock compensation expenses | $ | 1,583,000 | $ | 5,344,000 | ||
At December 31, 2023, the total stock-based compensation cost related to unvested awards not yet recognized was $0.4 million. The expected weighted average period compensation costs to be recognized was 1.8 years. Future option grants will impact the compensation expense recognized.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Mar 26, 2024 | Showing above |
| 2020 | Mar 9, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 23, 2018 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.