In March 2017, the Company’s Board of Directors adopted, and the stockholders approved, the 2017 Stock Option and Incentive Plan (the “2017 Plan”), that became effective in April 2017. The 2017 Plan provides for the issuance of incentive awards up to 4,600,000 shares of common stock to officers, employees, consultants and directors, less the number of shares subject to issued and outstanding awards under the 2011 Plan that were assumed in the Merger. The 2017 Plan also provides that the number of shares reserved for issuance thereunder will be increased annually on the first day of each year beginning in 2018 by four percent (4%) of the shares of our common stock outstanding on the last day of the immediately preceding year or such smaller increase as determined by our Board of Directors. In January 2021, the Company’s Board of Directors approved a 4% increase adding 1,890,052 shares to the 2017 Plan, which was effective as of January 1, 2021.

The options granted generally vest over 48 months. Under the 2017 Plan, options vest in installments of 25% at the one-year anniversary and thereafter in 36 equal monthly installments beginning on the 1^st of the month after the one-year anniversary date, subject to the employee’s continuous service with the Company. In May 2019, the Company issued a special retention grant of options to purchase an aggregate of 2,419,050 shares of common stock which vest in installments of 50% at June 30, 2020 and 50% at June 30, 2021, subject to the employee’s continuous service with the Company. The options generally expire ten years after the date of grant. The fair value of the options at the date of grant is recognized as an expense over the requisite service period. During the three months ended March 31, 2021 and 2020, option awards to purchase an aggregate of 71,428 and 702,000 shares of common stock were granted, respectively.

As of March 31, 2021 and December 31, 2020, 5,530,530 and 3,634,905 shares were reserved for issuance under the 2017 Plan, respectively.

The following table summarizes the stock option activity during the three months ended March 31, 2021:

	Stock Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value
Outstanding, January 1, 2021		4,642,240		$	1.81		7.00	$	358,209
Granted		71,428			1.46
Exercised		(78,769	)		0.89
Expired/cancelled		(149,573	)		1.52
Outstanding, March 31, 2021		4,485,326		$	1.83		6.79	$	1,016,074
Expected to vest, March 31, 2021		1,859,530		$	1.46		8.35	$	563,260
Options exercisable, March 31, 2021		2,625,796		$	2.10		5.69	$	452,814

Aggregate intrinsic value represents the estimated fair value of the Company’s common stock at in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable.

As of March 31, 2021, there was $1,126,603 of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 1.51 years.

On March 31, 2021 the Company’s non-employee directors were awarded 41,394 shares of the Company’s common stock at the fair market value of $1.29. The awards were in the form of Unrestricted Stock Awards (as defined in the 2017 Plan) equal to the quarterly cash retainer payable to such directors under the Company’s non-employee director compensation policy currently in effect divided by the average closing price of the Company’s common stock on the Nasdaq Capital Market during the quarter ending March 31, 2021.

The Company recognized the following compensation cost related to employee and non-employee stock-based compensation activity for the periods presented:

	Three Months Ended March 31,
	2021		2020
Research and development	$	108,014	$	131,678
General and administrative		237,742		195,789
Total	$	345,756	$	327,467

The total R&D expense of $108,014 was related to stock options. The total G&A expense of $237,742 consisted of $53,398 from stock awards and $184,344 from stock options.

The Company uses the Black-Scholes option pricing model to determine the estimated fair value for stock-based awards. Option pricing and models require the input of various assumptions, including the option’s expected life, expected dividend yield, price volatility and risk-free interest rate of the underlying stock. Accordingly, the weighted-average fair value of the options granted during the three months ended March 31, 2021 and 2020 was $0.89 and $0.31 per share, respectively. The calculation was based on the following assumptions.

	Three Months Ended March 31,
	2021		2020
Expected term (years)		5.31		6.08
Risk-free interest rate	0.50%		0.59%
Expected volatility	74.16%		67.33%
Expected dividend yield	0%		0%