6.	Stock-Based Compensation

2015

Equity Plan

The Diffusion Pharmaceuticals Inc.

2015

Equity Plan, as amended (the

"2015

Equity Plan"), provides for increases to the number of shares reserved for issuance thereunder each

January 1

equal to

4.0%

of the total shares of the Company’s Common Stock outstanding as of the immediately preceding

December 31,

unless a lesser amount is stipulated by the Compensation Committee of the Company's board of directors. Accordingly,

135,049

shares were added to the reserve as of

January 1, 2019,

which shares

may

be issued in connection with the grant of stock-based awards, including stock options, restricted stock, restricted stock units, stock appreciation rights and other types of awards as deemed appropriate, in each case, in accordance with the terms of the

2015

Equity Plan. As of

September 30, 2019,

there were

19,740

shares of Common Stock available for future issuance under the

2015

Equity Plan.

The Company recorded stock-based compensation expense in the following expense categories of its unaudited interim condensed consolidated statements of operations for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Research and development	$	13,519	$	16,202	$	40,692	$	48,848
General and administrative		131,802		311,194		344,913		922,984
Total stock-based compensation expense	$	145,321	$	327,396	$	385,605	$	971,832

The following table summarizes the activity related to all stock options for the

nine

months ended

September

30,

2019:

	Number of Options			Weighted average exercise price per share		Weighted average remaining contractual life (in years)
Balance at January 1, 2019		203,736		$	88.14
Granted		117,270			2.62
Forfeited		(11,583	)		83.81
Expired		(147	)		276.00
Outstanding at September 30, 2019		309,276		$	55.78	7.23
Exercisable at September 30, 2019		211,867		$	78.92	6.30

The weighted average grant date fair value of stock option awards granted was

$2.16

during the

nine

months ended

September

30,

2019.

The total fair value of options vested during the

three

months ended

September 30, 2019

and

2018

was

$0.2

million and

$0.3

million, respectively. The total fair value of options vested during the

nine

months ended

September 30, 2019

and

2018

was

$0.5

million and

$0.9

million, respectively.

options were exercised during any of the periods presented. At

September

30,

2019,

there was

$0.4

million of unrecognized compensation expense that will be recognized over a weighted-average period of

1.2

years.

Options granted were valued using the Black-Scholes option-pricing model and the weighted average assumptions used to value the options granted during the

nine

months ended

September

30,

2019

and

2018

were as follows:

	2019			2018
Expected term (in years)		5.52			5.57
Risk-free interest rate		2.2	%		2.4	%
Expected volatility		113.4	%		114.7	%
Dividend yield		—	%		—	%