Stock Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock Based Compensation

8. Stock Based Compensation

We have a 2000 Long-Term Incentive Plan, which expired on August 6, 2010. As of June 30, 2019, there were 14,020 shares subject to outstanding stock options under this plan. No further shares are available for future grant under this plan.

We also have a 2008 Stock Incentive Plan under which 5 million shares of common stock are reserved for issuance. As of June 30, 2019, there were approximately 2.4 million shares subject to outstanding stock options and approximately 0.8 million shares outstanding related to restricted stock grants issued from the 2008 Plan. This plan expired on November 20, 2018 and thus no further shares are available for future grant under this plan.

We follow ASC 718, Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees.

For stock options and stock warrants paid in consideration of services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50.

Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period, the value of these options, as calculated using the Black-Scholes option-pricing model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. As a result, the amount of the future compensation expense is subject to adjustment until the common stock options are fully vested.

The following table sets forth the total stock-based compensation expense resulting from stock options, restricted stock and warrants included in our Condensed Consolidated Statements of Operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019			2018
Research and development	$	—	$	29,451	$	(2,672	)	$	60,423
General and administrative — employee		214,706		404,231		427,880			833,220
Total employee stock-based compensation	$	214,706	$	433,682	$	425,208		$	893,643
General and administrative — non-employee		—		19,517		—			40,867
Total non-employee stock-based compensation	$	—	$	19,517	$	—		$	40,867

No options were granted during the current six-month-period ended June 30, 2019 as compared to 1,667 stock options at an exercise price of $1.89 during the comparative June 30, 2018 period. The fair value of the stock options was estimated using the Black-Scholes option-pricing model, based on the following assumptions:

	Six Months Ended June 30, 2019		Six Months Ended June 30, 2018
Risk-free interest rate		—		2.42	%
Expected volatility		—		91.6	%
Expected lives (years)		—		6
Expected dividend yield		—		0.00	%

Our computation of expected volatility is based on the historical daily volatility of our publicly traded stock. We use historical information to compute expected lives. In the six-month period ended June 30, 2018, the contractual term of the options granted was ten years. The dividend yield assumption of zero is based upon the fact we have never paid cash dividends and presently have no intention to do so. The risk-free interest rate used for each grant and issuance is equal to the U.S. Treasury rates in effect at the time of the grant and issuance for instruments with a similar expected life. On January 1, 2017, the Company adopted ASU 2016-09 and made a policy election to recognize forfeitures as they occur. The adoption of ASU 2016-09 did not have a material impact to the Company’s financial condition or results of operations. No amounts relating to stock-based compensation have been capitalized.

The Company recorded stock compensation expense on vested options of $75,410 and $148,146, respectively, for the three and six-month periods ended June 30, 2019, as compared to $294,386 and $616,581, respectively, for the three and six-month periods ended June 30, 2018.

As of June 30, 2019, there remained approximately $0.3 million of unrecognized compensation expense related to unvested stock options granted to current and former employees, directors, to be recognized as expense over a weighted-average period of 0.62 years. Presented below is our stock option activity:

	Six Months Ended June 30, 2019
	Number of Options (Employees)			Number of Options (Non-Employees)		Total Number of Options			Weighted-Average Exercise Price
Outstanding at January 1, 2019		2,190,835			365,000		2,555,835		$	10.69
Granted		—			—		—		$	—
Exercised, Forfeited or Expired		(178,258	)		—		(178,258	)	$	9.91
Outstanding at June 30, 2019		2,012,577			365,000		2,377,577		$	10.74
Options exercisable at June 30, 2019		1,816,429			365,000		2,181,429		$	11.53

The following table summarizes significant ranges of outstanding stock options under our plans at June 30, 2019:

Range of Exercise Prices	Total Number of Options		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Total Number of Options Exercisable		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price
$0.77 - $5.00		1,123,458		8.09	$	2.13		927,310		8.07	$	2.16
$5.01 – $11.00		165,834		3.45	$	10.98		165,834		3.45	$	10.98
$11.01 – $15.00		623,193		5.79	$	13.89		623,193		5.79	$	13.89
$15.01 – $48.30		465,092		4.18	$	27.25		465,092		4.18	$	27.25
		2,377,577		6.40	$	10.74		2,181,429		6.24	$	11.53

There was no aggregate intrinsic value to the outstanding options and vested options as of June 30, 2019.

At June 30, 2019 and December 31, 2018, there were warrants outstanding to purchase 193,196 and 693,196, respectively, at a weighted-average exercise price of $8.60 and $7.16, respectively, in each period.

Restricted Stock

No restricted stock was granted in 2019 and 2018. In December 2017, the Company granted to our Chairman and Chief Executive Officer, 387,597 shares of restricted common stock, pursuant to the 2008 Plan. This restricted stock vests in equal annual instalments over three years. The fair value of the restricted stock is based on the market price of the Company’s shares on the grant date less the par value received as consideration. The fair value of the restricted stock on the grant date was $679,000. In December 2016, the Company granted to our Chairman and Chief Executive Officer, 387,597 shares of restricted common stock, pursuant to the 2008 Plan. This restricted stock vests in equal annual instalments over three years. The fair value of the restricted stock is based on the market price of the Company’s shares on the grant date less the par value received as consideration. The fair value of the restricted stock on the grant date was $1,000,000 The Company recorded an employee stock-based compensation expense for restricted stock of $139,296 and $277,062 respectively, for the three and six-month periods ended June 30, 2019 as compared to $139,296 and $277,062 respectively, for the three and six-month periods ended June 30, 2018.