Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]  
As of December 31, 2022, there were 30,976,000 shares of Company common stock authorized for issuance under the CV Sciences, Inc. Amended and Restated 2013 Equity Incentive Plan (the "2013 Plan"). On June 11, 2019, the Company’s stockholders approved an amendment to the 2013 Plan to add an automatic “evergreen” provision regarding the number of shares to be annually added to the 2013 Plan. As a result, the number of shares of common stock that will be automatically added to the 2013 Plan on January 1st of each year during the term of the plan, starting with January 1, 2020, will be the lesser of: (a) 4% of the total shares of the Company’s common stock outstanding on December 31st of the prior year, (b) 4,000,000 shares of the Company’s common stock, or (c) a lesser number of shares of the Company’s common stock as determined by the Company’s Board of Directors. On January 1, 2023, the Company added 4,000,000 shares of the Company's common stock to the 2013 Plan pursuant to the evergreen provision, resulting in a total of 34,976,000 shares authorized for issuance under the 2013 Plan as of March 31, 2023. As of March 31, 2023, the Company had approximately 5,908,000 authorized but unissued shares reserved and available for issuance under the 2013 Plan. The 2013 Plan is scheduled to automatically terminate pursuant to its terms on June 3, 2024, after which no additional awards may be granted under the 2013 Plan.
On March 15, 2023, the Company’s board of directors approved, subject to shareholder approval, the adoption of a new 2023 Equity Incentive Plan (the “2023 Plan”), under which 34,976,000 shares of Company common stock will be authorized for issuance, if the 2023 Plan is approved by the Company’s shareholders. The 2023 Plan will be presented to the Company’s shareholders for approval at its 2023 Annual Meeting of shareholders, to be held on June 1, 2023. If the 2023 Plan is approved at the 2023 Annual Meeting, no further grants of awards will be made under the Company’s 2013 Plan, and any awards that are cancelled or expire under the 2013 Plan will not be reissued. If the Company’s shareholders do not approve the 2023 Plan, the 2023 Plan will not be effective and the 2013 Plan will remain in effect in accordance with its terms until its expiration.
As of March 31, 2023, total unrecognized compensation cost related to non-vested stock-based compensation arrangements was $0.3 million, which is expected to be recognized over a weighted-average period of 2.8 years.
The following summarizes activity related to the Company's stock options (in thousands, except per share data):
Number of Shares Weighted Average
Exercise Price
Weighted Average
Remaining Contract
Term (in years)
Aggregate Intrinsic Value
Outstanding - December 31, 2022 19,831 $ 0.46  3.5 $ — 
Granted 7,450 0.04  —  — 
Exercised —  —  — 
Cancelled (2,550) 0.45  —  — 
Outstanding - March 31, 2023 24,731 0.33  5.1
Exercisable - March 31, 2023 16,318 0.48  2.7 — 
Vested or expected to vest - March 31, 2023 24,731 $ 0.33  5.1 $
The Company has established performance milestones in connection with drug development efforts for its lead drug candidate CVSI-007. The above table includes 4,250,000 vested performance-based options as of March 31, 2023, which were issued to
Michael Mona Jr. ("Mona Jr.") outside of the 2013 Plan. As of March 31, 2023, there were 6,750,000 remaining unvested stock options granted to Mona Jr. outside of the 2013 Plan which are not included in the above table. These stock options vest upon the completion of future performance conditions (refer to Note 11).

There were no stock options exercised during the three months ended March 31, 2023 and 2022.
The following table presents the weighted average grant date fair value of stock options granted and the weighted-average assumptions used to estimate the fair value on the date of grant using the Black-Scholes valuation model:
Three months ended March 31,
2023 2022
Volatility 132.0% *
Risk-Free Interest Rate 3.8% *
Expected Term (in years) 5.77 *
Dividend Rate —% *
Fair Value Per Share on Grant Date $0.04 *
* There were no grants during the three months ended March 31, 2022.
The risk-free interest rates are based on the implied yield available on U.S. Treasury constant maturities with remaining terms equivalent to the respective expected terms of the options. Expected volatility is based on the historical volatility of the Company's common stock. The Company estimates the expected term for stock options awarded to employees, officers and directors using the simplified method in accordance with ASC Topic 718, Stock Compensation, because the Company does not have sufficient relevant historical information to develop reasonable expectations about future exercise patterns. In the future, as the Company gains historical data for the actual term over which stock options are held, the expected term may change, which could substantially change the grant-date fair value of future stock option awards, and, consequently, compensation of future grants.