7
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one) | |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | |
OR | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to
Commission File Number
(Exact Name of Registrant as Specified in Its Charter)
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Registrant’s telephone number, including area code: (
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: |
| Trading Symbol(s) | Name of Each Exchange on which Registered | |
| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934:
Accelerated filer ◻ | ||
Non-accelerated filer ◻ | Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes
The number of outstanding shares of the registrant’s common stock, par value $0.00001 per share, as of the close of business on July 29, 2022 was
ACLARIS THERAPEUTICS, INC.
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
ACLARIS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
| June 30, | December 31, | ||||
| 2022 |
| 2021 | |||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Short-term marketable securities |
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Accounts receivable, net | | | ||||
Prepaid expenses and other current assets |
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Total current assets |
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Marketable securities |
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Property and equipment, net |
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Intangible assets | | | ||||
Other assets |
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Total assets | $ | | $ | | ||
Liabilities and Stockholders’ Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | | $ | | ||
Accrued expenses |
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Current portion of lease liabilities | | | ||||
Discontinued operations | | | ||||
Total current liabilities |
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Other liabilities | |
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Contingent consideration | | | ||||
Deferred tax liability |
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Total liabilities |
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Commitments and contingencies (Note 16) | ||||||
Stockholders’ Equity: | ||||||
Preferred stock, $ | ||||||
Common stock, $ |
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Additional paid‑in capital |
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Accumulated other comprehensive loss |
| ( |
| ( | ||
Accumulated deficit |
| ( |
| ( | ||
Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
ACLARIS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||
Revenues: | |||||||||||||
Contract research | $ | | $ | | $ | | $ | | |||||
Other revenue | | | | | |||||||||
Total revenue | | | | | |||||||||
Costs and expenses: | |||||||||||||
Cost of revenue | | | | | |||||||||
Research and development |
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General and administrative |
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Revaluation of contingent consideration | ( | | ( | | |||||||||
Total costs and expenses |
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Loss from operations |
| ( |
| ( |
| ( |
| ( | |||||
Other income (expense), net |
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| ( |
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| ( | |||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Net loss per share, basic and diluted | ( | ( | ( | ( | |||||||||
Weighted average common shares outstanding, basic and diluted |
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Other comprehensive loss: | |||||||||||||
Unrealized gain (loss) on marketable securities, net of tax of $ | $ | ( | $ | | $ | ( | $ | ( | |||||
Foreign currency translation adjustment | — | ( | — | ( | |||||||||
Total other comprehensive loss |
| ( |
| ( |
| ( |
| ( | |||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
ACLARIS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY
(Unaudited)
(In thousands, except share data)
Accumulated | |||||||||||||||||
Common Stock | Additional | Other | Total | ||||||||||||||
Par | Paid‑in | Comprehensive | Accumulated | Stockholders’ | |||||||||||||
| Shares |
| Value |
| Capital |
| Loss |
| Deficit |
| Equity | ||||||
Balance at December 31, 2021 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units | | — | | — | — | | |||||||||||
Unrealized loss on marketable securities | — | — | — | ( | — | ( | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance at March 31, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units | | — | | — | — | | |||||||||||
Issuance of common stock under at-the-market sales agreement, net of offering costs of $ | | — | | — | — | | |||||||||||
Unrealized loss on marketable securities | — | — | — | ( | — | ( | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance at June 30, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Accumulated | |||||||||||||||||
Common Stock | Additional | Other | Total | ||||||||||||||
Par | Paid‑in | Comprehensive | Accumulated | Stockholders’ | |||||||||||||
| Shares |
| Value |
| Capital |
| Income (Loss) |
| Deficit |
| Equity | ||||||
Balance at December 31, 2020 | | $ | — | $ | | $ | ( | $ | ( | $ | | ||||||
Issuance of common stock in connection with exercise of stock options and warrants and vesting of restricted stock units | | — | ( | — | — | ( | |||||||||||
Issuance of common stock in connection with public offering, net of offering costs of $ | | — | | — | — | | |||||||||||
Unrealized loss on marketable securities | — | — | — | ( | — | ( | |||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | ( | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance at March 31, 2021 | | $ | — | $ | | $ | ( | $ | ( | $ | | ||||||
Issuance of common stock in connection with vesting of restricted stock units | | — | | — | — | | |||||||||||
Issuance of common stock in connection with public offering, net of offering costs of $ | | | | — | — | | |||||||||||
Unrealized gain on marketable securities | — | — | — | | — | | |||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | ( | |||||||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||
Balance at June 30, 2021 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ACLARIS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended | ||||||
June 30, | ||||||
| 2022 |
| 2021 | |||
Cash flows from operating activities: |
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Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization |
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Stock-based compensation expense |
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Revaluation of contingent consideration | ( | | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | ( | ( | ||||
Prepaid expenses and other assets |
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| ( | ||
Accounts payable |
| ( |
| ( | ||
Accrued expenses |
| ( |
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Net cash used in operating activities |
| ( |
| ( | ||
Cash flows from investing activities: | ||||||
Purchases of property and equipment |
| ( |
| ( | ||
Purchases of marketable securities |
| ( |
| ( | ||
Proceeds from sales and maturities of marketable securities |
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Net cash provided by (used in) investing activities |
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| ( | ||
Cash flows from financing activities: | ||||||
Proceeds from issuance of common stock in connection with public offerings, net of issuance costs | — | | ||||
Proceeds from issuance of common stock under the at-the-market sales agreement, net of issuance costs | | — | ||||
Payments of employee withholding taxes related to restricted stock unit award vesting | ( | ( | ||||
Proceeds from exercise of employee stock options and the issuance of stock | | | ||||
Net cash provided by financing activities |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period | $ | | $ | | ||
Supplemental disclosure of non-cash investing and financing activities: | ||||||
Additions to property and equipment included in accounts payable | $ | | $ | | ||
Offering costs included in accounts payable | $ | — | $ | | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ACLARIS THERAPEUTICS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Nature of Business
Overview
Aclaris Therapeutics, Inc. was incorporated under the laws of the State of Delaware in 2012. In 2015, Aclaris Therapeutics International Limited (“ATIL”) was established under the laws of the United Kingdom as a wholly-owned subsidiary of Aclaris Therapeutics, Inc. In 2017, Confluence Life Sciences, Inc. (now known as Aclaris Life Sciences, Inc.) (“Confluence”) was acquired by Aclaris Therapeutics, Inc. and became a wholly-owned subsidiary thereof. Aclaris Therapeutics, Inc., ATIL and Confluence are referred to collectively as the “Company.” The Company is a clinical-stage biopharmaceutical company focused on developing novel drug candidates for immuno-inflammatory diseases. In addition to developing its novel drug candidates, the Company is pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize its novel drug candidates.
Liquidity
The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. As of June 30, 2022, the Company had cash, cash equivalents and marketable securities of $
Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such funds, if raised, may not be sufficient to enable the Company to continue to implement its long-term business strategy. The Company’s ability to raise additional capital may be adversely impacted by the potential worsening of global economic conditions, including inflationary pressure, and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the COVID-19 pandemic and geopolitical tensions. If the Company is unable to raise sufficient additional capital or generate revenue from transactions with potential third-party partners for the development and/or commercialization of its drug candidates, it may need to substantially curtail planned operations. The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.
The Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that its condensed consolidated financial statements are issued. As of the report date, the Company does not believe that substantial doubt exists about its ability to continue as a going concern. The Company believes its existing cash, cash equivalents and marketable securities are sufficient to fund its operating and capital expenditure requirements for a period greater than 12 months from the date of issuance of these condensed consolidated financial statements.
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2. Summary of Significant Accounting Policies
Unaudited Interim Financial Information
The accompanying condensed consolidated balance sheet as of June 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021, the condensed consolidated statement of stockholders’ equity for the three and six months ended June 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 24, 2022 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2022, the results of its operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021, its changes in stockholders’ equity for the three and six months ended June 30, 2022 and 2021 and its cash flows for the six months ended June 30, 2022 and 2021. The condensed consolidated balance sheet data as of December 31, 2021 was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States (“GAAP”). The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2022 and 2021 are unaudited. The results for the three and six months ended June 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. The unaudited interim financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2022.
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP. The condensed consolidated financial statements of the Company include the accounts of the operating parent company, Aclaris Therapeutics, Inc., and its wholly-owned subsidiaries, ATIL and Confluence. All intercompany transactions have been eliminated. Based upon the Company’s revenue, the Company believes that gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the condensed consolidated statement of operations.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, contingent consideration and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from the Company’s estimates.
Significant Accounting Policies
The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2022. Except as set forth below, there have been no changes to the Company’s significant accounting policies from those disclosed in the annual report.
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Contingent Consideration
The Company initially recorded a contingent consideration liability at fair value on the date of acquisition related to future potential payments resulting from the acquisition of Confluence based upon significant unobservable inputs including the achievement of development, regulatory and commercial milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value of the potential payments. Significant judgement was involved in determining the appropriateness of these assumptions. These assumptions are considered Level 3 inputs. Revaluation of the contingent consideration liability can result from changes to one or more of these assumptions. The Company evaluates the fair value estimate of the contingent consideration liability on a quarterly basis with changes, if any, recorded as income or expense in the condensed consolidated statement of operations.
The fair value of contingent consideration is estimated using a probability-weighted expected payment model for regulatory milestone payments and a Monte Carlo simulation model for commercial milestone and royalty payments and then applying a risk-adjusted discount rate to calculate the present value of the potential payments. Significant assumptions used in the Company’s estimates include the probability of achieving regulatory milestones and commencing commercialization, which are based on an asset’s current stage of development and a review of existing clinical data. Probability of success assumptions ranged between
3. Fair Value of Financial Assets and Liabilities
The following tables present information about the fair value measurements of the Company’s financial assets and liabilities which are measured at fair value on a recurring and non-recurring basis, and indicate the level of the fair value hierarchy utilized to determine such fair values:
June 30, 2022 | ||||||||||||
(In thousands) |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Assets: |
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Cash equivalents | $ | | $ | — | $ | — | $ | | ||||
Marketable securities |
| — | | — | | |||||||
Total assets | $ | | $ | | $ | — | $ | | ||||
Liabilities: | ||||||||||||
Contingent consideration | $ | — | $ | — | $ | | $ | | ||||
Total liabilities | $ | — | $ | — | $ | | $ | | ||||
December 31, 2021 | ||||||||||||
(In thousands) |
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Assets: |
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Cash equivalents | $ | | $ | — | $ | — | $ | | ||||
Marketable securities |
| — | | — | | |||||||
Total assets | $ | | $ | | $ | — | $ | | ||||
Liabilities: | ||||||||||||
Contingent consideration | $ | — | $ | — | $ | | $ | | ||||
Total liabilities | $ | — | $ | — | $ | | $ | | ||||
As of June 30, 2022 and December 31, 2021, the Company’s cash equivalents consisted of a money market fund, which was valued based upon Level 1 inputs. The Company’s marketable securities as of June 30, 2022 and December
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31, 2021 consisted of commercial paper and corporate, asset-backed and U.S. government agency debt securities, which were all valued based upon Level 2 inputs. Marketable securities as of December 31, 2021 also included foreign government agency debt securities which were all valued based upon Level 2 inputs.
In determining the fair value of its Level 2 investments, the Company relies on quoted prices for identical securities in markets that are not active. These quoted prices are obtained by the Company with the assistance of a third-party pricing service based on available trade, bid and other observable market data for identical securities. The Company compares the quoted prices obtained from the third-party pricing service to other available independent pricing information to validate the reasonableness of the quoted prices provided. The Company evaluates whether adjustments to third-party pricing are necessary and, historically, the Company has not made adjustments to quoted prices obtained from the third-party pricing service. During the three and six months ended June 30, 2022 and 2021, there were
A decrease in the fair value of the contingent consideration liability of $
As of June 30, 2022 and December 31, 2021, the fair value of the Company’s available-for-sale marketable securities by type of security was as follows:
June 30, 2022 | ||||||||||||
Gross | Gross | |||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||
(In thousands) | Cost | Gain | Loss | Value | ||||||||
Marketable securities: | ||||||||||||
Corporate debt securities | $ | | $ | — | $ | ( | $ | | ||||
Commercial paper | | — | — | | ||||||||
Asset-backed debt securities(1) | | — | ( | | ||||||||
U.S. government agency debt securities | | — | ( | | ||||||||
Total marketable securities | $ | | $ | — | $ | ( | $ | | ||||
(1) Included in Asset-backed debt securities is $ | ||||||||||||
December 31, 2021 | ||||||||||||
Gross | Gross | |||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||
(In thousands) | Cost | Gain | Loss | Value | ||||||||
Marketable securities: | ||||||||||||
Corporate debt securities(1) | $ | | $ | | $ | ( | $ | | ||||
Commercial paper | | — | — | | ||||||||
Asset-backed debt securities | | — | ( | | ||||||||
Foreign government agency debt securities | | — | ( | | ||||||||
U.S. government agency debt securities(2) | | — | ( | | ||||||||
Total marketable securities | $ | | $ | | $ | ( | $ | | ||||
(1) Included in Corporate debt securities is $ | ||||||||||||
(2) Included in US government agency debt securities is $ | ||||||||||||
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4. Property and Equipment, Net
Property and equipment, net consisted of the following:
June 30, | December 31, | |||||
(In thousands) | 2022 | 2021 | ||||
Computer equipment |
| $ | |
| $ | |
Lab equipment | | | ||||
Furniture and fixtures | | | ||||
Leasehold improvements | | | ||||
Property and equipment, gross |
| |
| | ||
Accumulated depreciation |
| ( |
| ( | ||
Property and equipment, net | $ | | $ | | ||
Depreciation expense was $
5. Intangible Assets
Intangible assets consisted of the following:
Gross Cost | Accumulated Amortization | ||||||||||||||
Remaining | June 30, | December 31, | June 30, | December 31, | |||||||||||
(In thousands, except years) |
| Life (years) |
| 2022 |
| 2021 |
| 2022 |
| 2021 | |||||
Other intangible assets | $ | | $ | | $ | | $ | | |||||||
In-process research and development | n/a | | | — | — | ||||||||||
Total intangible assets | $ | | $ | | $ | | $ | | |||||||
Amortization expense was $
As of June 30, 2022, estimated future amortization expense was as follows:
Year Ending | |||
(In thousands) |
| December 31, | |
2022 | $ | | |
2023 |
| | |
2024 |
| | |
2025 | | ||
2026 | | ||
Thereafter | | ||
Total | $ | |
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6. Accrued Expenses
Accrued expenses consisted of the following:
June 30, | December 31, | |||||
(In thousands) |
| 2022 |
| 2021 | ||
Employee compensation expenses | $ | | $ | | ||
Research and development expenses | | | ||||
Litigation settlements (see Note 16) | — | | ||||
Other |
| |
| | ||
Total accrued expenses | $ | | $ | | ||
7. Debt
Loan and Security Agreement – Silicon Valley Bank
In March 2020, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”). The Loan and Security Agreement provided for $
In July 2021, the Company repaid in full the $
8. Stockholders’ Equity
Preferred Stock
As of June 30, 2022 and December 31, 2021, the Company’s amended and restated certificate of incorporation authorized the Company to issue
Common Stock
As of June 30, 2022 and December 31, 2021, the Company’s amended and restated certificate of incorporation authorized the Company to issue
Each share of common stock entitles the holder to
Warrants
The Warrant issued to SVB in March 2020 had an initial exercise price of $
11
January 2021 Public Offering
In January 2021, the Company closed a public offering in which it sold
June 2021 Public Offering
In June 2021, the Company closed a public offering in which it sold
Sales of Common Stock Pursuant to At-The-Market Facility
In April 2022, the Company sold
9. Stock-Based Awards
2015 Equity Incentive Plan
In September 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”), and the Company’s stockholders approved the 2015 Plan. The 2015 Plan became effective in connection with the Company’s initial public offering in October 2015. Beginning at the time the 2015 Plan became effective, no further grants may be made under the Company’s 2012 Equity Compensation Plan, as amended and restated (the “2012 Plan”). The 2015 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, performance stock awards, cash-based awards and other stock-based awards. The number of shares initially reserved for issuance under the 2015 Plan was
2017 Inducement Plan
In July 2017, the Company’s board of directors adopted the 2017 Inducement Plan (the “2017 Inducement Plan”). The 2017 Inducement Plan is a non-stockholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The Company had
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2012 Equity Compensation Plan
Upon the 2015 Plan becoming effective,
Stock Option Valuation
The weighted average assumptions the Company used to estimate the fair value of stock options granted during the six months ended June 30, 2022 and 2021 were as follows:
| Six Months Ended | |||||
June 30, | ||||||
2022 | 2021 | |||||
Risk-free interest rate |
| | % | | % | |
Expected term (in years) |
| |||||
Expected volatility |
| | % | | % | |
Expected dividend yield |
| | % | | % | |
The Company recognizes compensation expense for awards over their vesting period. Compensation expense for awards includes the impact of forfeitures in the period when they occur.
Stock Options
The following table summarizes stock option activity for the six months ended June 30, 2022:
|
|
| Weighted |
| ||||||
Weighted | Average | |||||||||
Average | Remaining | Aggregate | ||||||||
Number | Exercise | Contractual | Intrinsic | |||||||
(In thousands, except share and per share data and years) | of Shares | Price | Term | Value | ||||||
(in years) | ||||||||||
Outstanding as of December 31, 2021 |
| | $ | |
| $ | | |||
Granted |
| | | |||||||
Exercised |
| ( | | | ||||||
Forfeited and cancelled |
| ( | | |||||||
Outstanding as of June 30, 2022 |
| | $ | |
| $ |
| |||