SHARE-BASED COMPENSATION

The following table sets forth the amount of share-based compensation expense recognized by the Company by line item on its consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017 (in thousands):



	Year ended December 31,
	2019		2018		2017
Research and development	$	188	$	505	$	404
General and administrative	1,049		778		977
Total Share-based Compensation	$	1,237	$	1,283	$	1,381

2014 Stock Incentive Plan

The Company's 2014 Stock Incentive Plan, as amended ("2014 Plan"), was adopted by its board of directors in December 2013 and subsequently approved by its stockholders in January 2014. The 2014 Plan became effective immediately prior to the closing of the Company's IPO in February 2014 and provides for the grant of incentive and non-qualified stock options, restricted stock awards and units, stock appreciation rights and other stock-based awards, with amounts and terms of grants determined by the Company's board of directors at the time of grant, to the Company's employees, officers, directors, consultants and advisors. Currently there are only stock options outstanding under the 2014 Plan, which generally vest over a four-year period at the rate of 25% of the grant vesting on the first anniversary of the date of grant and 6.25% of the grant vesting at the end of each successive three-month period thereafter. Stock options granted under the 2014 Plan are exercisable for a period of ten years from the date of grant. There were 4.0 million stock options outstanding under the 2014 Plan as of December 31, 2019.

At the Annual Meeting of Stockholders in June 2019, the Company's stockholders approved an amendment to the 2014 Plan that (i) increased by 7.9 million the number of shares of common stock reserved for issuance under the 2014 Plan and (ii) eliminated the “evergreen” or automatic replenishment provision of the 2014 Plan, pursuant to which the number of shares of common stock authorized for issuance under the 2014 Plan was automatically increased on an annual basis. There were 8.8 million shares of common stock available for issuance under the 2014 Plan as of December 31, 2019.

2009 Stock Incentive Plan

The Company maintains a 2009 Stock Incentive Plan, as amended and restated ("2009 Plan"), which provided for the grant of incentive and non-qualified stock options and restricted stock awards and units, with amounts and terms of grants determined by the Company's board of directors at the time of grant, to its employees, officers, directors, consultants and advisors. Upon the closing of its IPO in February 2014, the Company ceased granting awards under the 2009 Plan and all shares (i) available for issuance under the 2009 Plan at such time and (ii) subject to outstanding awards under the 2009 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased without having been fully exercised or resulting in any common stock being issued were carried over to the 2014 Plan. Stock options granted under the 2009 Plan are exercisable for a period of ten years from the date of grant. There were remaining 0.1 million fully vested stock options outstanding under the 2009 Plan as of December 31, 2019.

Out-of-Plan Inducement Grants

From time to time, the Company has granted equity awards to its newly hired employees in accordance with the Nasdaq Stock Market LLC ("Nasdaq") employment inducement grant exemption (Nasdaq Listing Rule 5635(c)(4)). Such grants are made outside of the 2014 Plan and act as an inducement material to the employee's acceptance of employment with the Company. As of December 31, 2019, there were 2.1 million stock options outstanding which were granted as employment inducement awards outside of the 2014 Plan.

Stock Options

The following table sets forth a summary of the Company’s total stock option activity, including awards granted under the 2014 Plan and 2009 Plan and inducement grants made outside of stockholder approved plans, for the years ended December 31, 2019, 2018 and 2017:



	Number of Shares under Option (in thousands)		Weighted-Average Exercise Price per Option	Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2016	2,024		$4.41	8.73	$	841
Granted	1,303		$1.64
Exercised	(140	)	$0.28
Canceled or forfeited	(491	)	$5.10
Outstanding at December 31, 2017	2,696		$3.16	8.55	$	146
Granted	3,546		$1.71
Exercised	(439	)	$0.62
Canceled or forfeited	(1,861	)	$3.21
Outstanding at December 31, 2018	3,942		$2.12	9.14	$	57
Granted	3,986		$1.02
Exercised	(90	)	$1.10
Canceled or forfeited	(1,602	)	$1.78
Outstanding at December 31, 2019	6,236		$1.52	8.83	$	358
Exercisable at December 31, 2019	1,866		$2.31	8.06	$	62

The Company recognized share-based compensation expense related to stock options of $1.2 million, $1.1 million and $0.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $3.2 million of total unrecognized compensation cost related to non-vested stock options which the Company expects to recognize over a weighted-average period of 2.90 years. The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2019, 2018 and 2017 were $0.69, $1.14 and $1.18, respectively. The total intrinsic value of options exercised for the years ended December 31, 2019, 2018 and 2017 was de minimis, $0.5 million and $0.3 million, respectively.

For the years ended December 31, 2019, 2018 and 2017, the grant-date fair value of stock options was determined using the following weighted-average inputs and assumptions in the Black-Scholes option pricing model:



	Year ended December 31,
	2019	2018	2017
Fair value of common stock	$1.02	$1.71	$1.74
Exercise price of the option	$1.02	$1.71	$1.74
Expected term (years)	5.98	5.97	5.59
Risk-free interest rate	2.1%	2.8%	1.9%
Expected volatility	78.1%	74.2%	81.6%
Dividend yield	—%	—%	—%

Performance-Based Grants

In October 2017, the Company granted to certain executives a total of 0.9 million performance-based stock options with an exercise price of $1.59 and a grant-date fair value of $1.12 per option. The four performance milestone events were specific to the Company’s corporate goals, including certain clinical development objectives related to the VISTA Trial, as well as a past financing objective. In the fourth quarter of 2017, management deemed it probable that two of the performance objectives were achieved. During 2018, management determined that one performance objective was achieved and deemed it probable that a second performance-based milestone would be achieved. The Company recognized share-based compensation expense related to performance-based stock options of de minimis, $0.2 million and $0.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was no unrecognized compensation cost related the performance-based stock options granted in October 2017.

Restricted Stock

From time to time, prior to December 31, 2016 and upon approval by the board of directors, certain employees and advisors were granted restricted stock awards ("RSAs") and restricted stock units ("RSUs"), all of which were vested prior to December 31, 2018. The Company did not grant RSAs or RSUs during the years ended December 31, 2019, 2018 and 2017.

The following table sets forth a summary of the Company's restricted stock activity for the years ended December 31, 2018 and 2017:



	Non-vested Restricted Stock Awards (in thousands)		Weighted-Average Grant Date Fair Value	Non-vested Restricted Stock Units (in thousands)		Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2016	22		$11.43	3		$4.09
Vested	(18	)	$11.43	(3	)	$4.09
Non-vested at December 31, 2017	4		$11.43	—
Vested	(4	)	$11.43
Non-vested at December 31, 2018	—

The Company recognized share-based compensation expense related to restricted stock of de minimis and $0.2 million for the years ended December 31, 2018 and 2017, respectively.