Stock-based Compensation

August 21, 2014,

the Company’s Board of Directors superseded the

2006

Equity Incentive Plan (the

“2006

Plan”) with the

2014

Equity Incentive Plan (the

“2014

Plan”), and the

2014

Employee Stock Purchase Plan (the

“2014

ESPP”). On

October 3, 2014,

the stockholders approved these plans.

June 20, 2017,

the Company’s Board of Directors amended the

2014

Plan (the “Amended

2014

Plan”). On

July 31, 2017,

the stockholders approved this amendment.

The Plans provide for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock and stock unit awards, performance units, stock grants and qualified performance-based awards. Under the

2006

Plan,

new stock compensation awards will be granted subsequent to the completion of the Company’s IPO. The Company initially reserved

17,600

shares of Common Stock for issuance under the

2014

Plan. The

2014

Plan provides that the number of shares reserved and available for issuance under the

2014

Plan will automatically increase each

January 1,

beginning

January 1, 2015

four

percent of the outstanding shares of Common Stock on the immediately preceding

December 31

or such lesser number of shares as determined by the Company’s Board of Directors prior to each such

January

1st.

The Amended

2014

Plan clarifies that the number of shares for purposes of calculating the evergreen feature includes the number of shares of Common Stock issuable upon conversion of any security that the Company

may

issue that is convertible into or exchangeable for Common Stock, including, but

not

limited to, preferred stock or warrants. Pursuant to the evergreen provision, the number of shares available for issuance under the Amended

2014

Plan will increase by

900,003

shares from

129,088

shares to

1,074,384

shares on

January 1, 2020.

Terms of the stock awards, including vesting requirements, are determined by the Board of Directors, subject to the provisions of the Plans. Options granted by the Company typically vest over

three

four

years. Certain awards provide for accelerated vesting if there is a change in control as defined in the Plans. Stock options outstanding under the

2006

Plan are exercisable from the date of grant for a period of

ten

years. Stock options granted under the Amended

2014

Plan are exercisable only upon vesting. For options granted to date, the exercise price equaled the fair value of the Common Stock as determined by the Board of Directors on the date of grant.

Stock-based compensation expense

Total stock-based compensation expense is recognized for stock options granted to employees and non-employees and has been reported in the Company’s consolidated statements of operations as follows (in thousands):

	Year Ended December 31,
	2019		2018

Research and development	$	233	$	1,142
General and administrative		710		2,287
Total	$	943	$	3,429

The Company estimates the fair value of each employee stock award on the grant date using the Black-Scholes option-pricing model based on the following assumptions regarding the fair value of the underlying Common Stock on each measurement date:

	Year Ended December 31,
	2019			2018
Weighted average expected volatility		89.6	%		93.5	%
Expected term (in years)		6.10			6.07
Risk free interest rate		2.60	%		2.55	%
Expected dividend yield		0	%		0	%

Stock Options

The following table summarizes stock option activity for employees and non-employees:

	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value

Outstanding at December 31, 2018		114,931		$	204.76		7.4	$	404
Granted		29,562		$	106.32
Exercised		-		$	-
Forfeited		(80,431	)	$	124.40
Expired		(63,951	)	$	260.40
Outstanding at December 31, 2019		111		$	218.40		0.1	$	-
Exercisable at December 31, 2019		111		$	218.40		0.1	$	-
Vested or expected to vest at December 31, 2019 (1)		111		$	218.40		0.1	$	-

_____________

(

) Represents the number of vested options at

December 31, 2019

plus the number of unvested options expected to vest based on the unvested options outstanding at

December 31, 2019.

During the year ended

December 31, 2019,

the Company granted stock options to purchase an aggregate of

29,563

shares of its Common Stock with a weighted-average grant date fair value of

$80.00.

During the year ended

December 31, 2018,

the Company granted stock options to purchase an aggregate of

51,040

shares of its Common Stock with a weighted-average grant date fair value of

$104.32.

The total intrinsic value of options exercised in the years ended

December 31, 2019

and

2018

was

and

and respectively. As of

December 31, 2019,

and

2018

there was

$0.0

million and

$4.6

million, respectively of total unrecognized compensation cost related to employee non-vested stock options.

Employee Stock Purchase Plan

The

2014

Employee Stock Purchase Plan (“ESPP”) initially authorized the issuance of up to

3,513

shares of Common Stock. The number of shares increases each

January 1,

commencing on

January 1, 2015

and ending on (and including)

January 1, 2024,

by an amount equal to the lesser of

one

percent of the outstanding shares as of the end of the immediately preceding fiscal year,

281,000

shares or any lower amount determined by the Company’s Board of Directors prior to each such

January

1st.

As of

December 31, 2019,

as a result of an increase on

January 1, 2019

one

percent of the outstanding shares as of the end of the fiscal year ending

December 31, 2018,

the

2014

ESPP authorized the issuance of up to

4,811

shares of Common Stock. The

tenth

offering under the

2014

ESPP began on

July 1, 2019

and ended on

September 30, 2019.

During the years ended

December 31, 2019

and

2018,

shares and

1,859

shares, respectively, were issued under the

2014

ESPP. The Company incurred

$0.1

million in stock-based compensation expense related to the

2014

ESPP for the years ended

December 31, 2019,

2018,

and

2017.

January 1, 2020,

as a result of the increase of

one

percent of the outstanding shares as of the end of the fiscal year ending

December 31, 2019,

the

2014

ESPP increased the authorized shares available for issuance by

5,576

shares.