Note

Stockholders’ Equity

We have granted share-based compensation awards to employees, board members and service providers. Awards

may

consist of common stock, restricted common stock, restricted common stock units, common stock purchase warrants, or common stock purchase options. Our common stock purchase options and stock purchase warrants have lives of up to

ten

years from the grant date. Awards vest either upon the grant date or over varying periods of time. The stock options provide for exercise prices equal to or greater than the fair value of the common stock at the date of the grant. Restricted stock units grant the holder the right to receive fully paid common shares with various restrictions on the holder’s ability to transfer the shares. As of

September 30, 2019,

we have approximately

8.5

million shares of common stock reserved for issuance upon the granting of awards under our equity incentive plans and the exercise of outstanding equity-linked instruments.

We typically record share-based compensation expense on a straight-line basis over the requisite service period. Share-based compensation expenses included in the statements of operations are as follows:

	Three Months Ended September 30,
	2019		2018

Research and development expenses	$	-	$	22,917
General and administrative expenses		294,600		111,778
Total	$	294,600	$	134,695

	Nine Months Ended September 30,
	2019		2018

Research and development expenses	$	200,337	$	110,417
General and administrative expenses		561,007		459,856
Total	$	761,344	$	570,273

Stock Options

A summary of stock option activity and related information for the

nine

months ended

September 30, 2019

follows:

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value

Outstanding at January 1, 2019		81,674		$	215.60		5.1	$	-
Granted		228,183		$	7.78
Exercised		-		$	-			$	-
Forfeited		(10,127	)	$	86.07
Outstanding at September 30, 2019		299,730		$	61.78		7.9	$	-

Exercisable at September 30, 2019		206,347		$	86.15		7.2	$	-

Range of Exercise Prices			Number of Options Outstanding		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
$5.90	-	$6.00		58,010	$	5.99		9.3	$	-
$7.20	-	$8.80		162,593	$	8.51		9.2		-
$22.20	-	$99.20		36,138	$	33.20		5.6		-
$107.40	-	$1,102.41		42,989	$	362.61		2.9		-
				299,730	$	61.78		7.9	$	-

The Company uses the Black-Scholes option pricing model for “plain vanilla” options and other pricing models as appropriate to calculate the fair value of options. The Company generally uses the “simplified method” to estimate expected life. Significant assumptions used in these models include:

	Nine Months Ended September 30,
	2019			2018

Annual dividend		-			-
Expected life (in years)	4.8	-	5.5	2.5	-	5.3
Risk free interest rate	1.8%	-	2.5%	2.7%	-	2.8%
Expected volatility	97%	-	115%	97%	-	117%

Options granted in the

nine

months ended

September 30, 2019

and

2018,

had a weighted average grant date fair value of

$3.45

and

$15.40

per share, respectively.

Unrecognized compensation cost for unvested stock option awards outstanding at

September 30, 2019

was approximately

$384,000

to be recognized over approximately

0.7

years.

In the

three

months ended

March 31, 2019,

the Company modified certain awards in conjunction with an employee’s termination. The modification provided for the accelerated vesting of all unvested awards and the extension of the post-employment exercise period. The modifications resulted in approximately

$102,000

of additional research and development expenses in the

three

months ended

March 31, 2019.

RSUs

We have granted restricted stock units (RSUs) to certain employees and board members that entitle the holders to receive shares of our common stock upon vesting and subject to certain restrictions regarding the exercise of the RSUs. The grant date fair value of RSUs is based upon the market price of the underlying common stock on the date of grant.

In the

nine

months ended

September 30, 2019

and

2018,

we granted

4,904

and

2,253

RSU’s, respectively. RSUs granted in the

nine

months ended

September 30, 2019

and

2018,

had a weighted average grant date fair value of

$5.90

and

$22.20,

respectively.

RSUs vesting in the

nine

months ended

September 30, 2019

had a total value of approximately

$6,400.

September 30, 2019,

we had

5,467

outstanding RSUs with a weighted average grant date fair value of

$29.62

and a total intrinsic value of approximately

$10,400.

Unrecognized compensation cost for unvested RSUs at

September 30, 2019

was approximately

$22,000

to be recognized over approximately

0.8

years.

In the

nine

months ended

September 30, 2019,

1,127

RSU’s having an intrinsic value of approximately

$10,400

were converted.

RSU’s were converted in the

nine

months ended

September 30, 2018.

Restricted Stock

We have granted restricted stock to certain board members that vest quarterly over the grant year. The grant date fair value of the restricted stock is based upon the market price of the common stock on the date of grant.

In the

nine

months ended

September 30, 2019

and

2018,

we granted

15,689

and

2,253

shares of restricted stock, respectively. Restricted stock granted in the

nine

months ended

September 30, 2019

and

2018,

had a weighted average grant date fair value of

$5.95

and

$22.20,

respectively.

Restricted stock vesting in the

nine

months ending

September 30, 2019,

had a weighted average grant date fair value of

$9.73

and a total intrinsic value of approximately

$14,500.

September 30, 2019,

we had

11,972

shares of restricted stock outstanding with an average grant date fair value of

$5.95.

Unrecognized compensation cost for unvested restricted stock awards at

September 30, 2019

was approximately

$71,300

to be recognized over approximately

0.8

years.

Stock Purchase Warrants.

We have issued warrants to purchase common stock to certain officers, directors, stockholders and service providers as well as in conjunction with debt and equity offerings and at various times replacement warrants were issued as an inducement for warrant exercises.

May 2016

and

August 2017,

we issued a total of

87,309

and

112,500

common stock purchase warrants, respectively in conjunction with our offerings. Such warrants are classified as liabilities due to the existence of certain net cash settlement provisions

contained in the warrants. At

September 30, 2019,

after giving effect to exercises,

149,136

of these common stock purchase warrants remain outstanding and are recorded at fair value as mark-to-market liabilities (see Note

February 2019,

we granted

25,000

warrants to an outside

third

party as partial compensation for services. The warrants have an exercise price of

$6.00,

expire

January 2024

and have a grant date fair value of

$3.80

per warrant. The warrants vest

25%

on grant and

75%

on completion of initial services; the warrants were fully vested as of

September 30, 2019.

The warrants were valued using the Black-Scholes option pricing model with the following inputs:

annual dividend, expected life of

2.5

years, risk-free rate of

2.5%

and expected volatility of

110%.

July 2019,

in connection with our underwritten public offering, we issued the following equity classified common stock purchase warrants: (i)

3,194,443

short-term common stock purchase warrants with an exercise price of

$2.70

per share, exercisable immediately and expiring on

December 31, 2020; (

ii)

3,194,443

long-term common stock purchase warrants with an exercise price of

$2.70

per share, exercisable immediately and expiring

-years from issuance and (iii)

2,361,462

“prefunded” common stock purchase warrants with an exercise price of

$0.0001

per share, exercisable immediately with

expiration date. As of

September 30, 2019,

1,313,296

of the “prefunded warrants” had been exercised generating approximately

$100

in proceeds.

In connection with the

July

public offering we also granted the underwriters

222,223

equity classified common stock purchase warrants with an exercise price of

$3.375

per share, exercisable immediately and expiring

-years from issuance.

A summary of outstanding warrants at

September 30, 2019

follows:

Range of Exercise Prices			Number of Warrants Outstanding		Range of Expiration Dates
	$0.0001			1,048,166	perpetual
$2.19	-	$2.70		6,538,035	December 2020	-	August 2024
$3.38	-	$17.50		406,223	October 2023	-	July 2024
$22.20	-	$782.60		26,479	October 2019	-	July 2023
				8,018,903

Preferred and Common Stock

We have outstanding

200,000

shares of Series A

4.5%

Convertible Preferred Stock issued in

December 2016.

Shares of the Series A

4.5%

Convertible Preferred Stock are convertible into

38,873

shares of the Company’s common stock subject to certain ownership restrictions. In

July 2019,

334,809

Series A

4.5%

Convertible Preferred Stock shares were converted into

65,077

shares of common stock in accordance with their terms.

July 2019,

we completed

an underwritten public offering of

416,315

units (“Units”) and

2,361,462

prefunded units (“Prefunded Units”) at a price of

$2.70

per each unit resulting in gross proceeds of approximately

$7.5

million. Each Unit was comprised of

one

share of common stock,

one

short-term warrant and

one

long-term warrant. Each Prefunded Unit was comprised of

one

prefunded-warrant,

one

short-term warrant and

one

long-term warrant. The prefunded warrants have an exercise price of

$0.0001

per share and are exercisable at any time from issuance until all prefunded warrants are exercised. The short-term and long-term warrants have an exercise price of

$2.70

per share and are exercisable immediately. The short-term warrant expires

December 31, 2020

and the long-term warrant expires

five

-years from issuance. The net proceeds of the offering were approximately

$6.6

million, after deducting underwriting discounts and commissions and offering expenses. In addition to the above units, the underwriters exercised their option and purchased an additional short-term

416,666

additional short-term and

416,666

additional long-term warrant combinations at the public offering price per share and per warrant combination, before deducting underwriting discounts and commissions. The securities were sold pursuant to a registration statement on Form S-

(file

no.

333

232273