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Stock Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

5. Stock Based Compensation

The Company has a 2000 Long-Term Incentive Plan, which expired on August 6, 2010. As of September 30, 2020, there were no remaining shares subject to outstanding stock options under this plan. No further shares are available for future grant under this plan.

The Company also has a 2008 Stock Incentive Plan under which 5 million shares of common stock are reserved for issuance. As of September 30, 2020, there were approximately 2.3 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.

In November 2019, the Company adopted the 2019 Stock Incentive Plan under which 5.4 million shares of common stock were reserved for issuance. As of September 30, 2020, there remained outstanding stock options to purchase 0.9 million shares issued under this Plan. No other options are available for issuance under this Plan, which expires on November 14, 2029.

During the period ended September 30, 2020, the Company issued an aggregate of approximately 2.8 million shares of its common stock upon the exercise of 4.55 million options. Of the 4.55 million option shares, holders of 4.4 million options exercised their shares on a cashless basis into approximately 2.69 million shares of the Company’s common stock. The Company received $39,000 for the exercise of the remaining 150,000 options shares in exchange for 150,000 shares of its common stock.

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 September 30,				Nine Months Ended September, 30,
	2020		2019		2020		2019
Research and development	$	—	$	—	$		$	(2,672	)
General and administrative — employee		87,277		216,234		260,598		644,113
Total employee stock-based compensation	$	87,277	$	216,234	$	260,598	$	641,441

Options

There were no options granted in either periods ended September 30, 2020 and September 30, 2019.

Presented below is our stock option activity:

	Nine Months Ended September 30, 2020
	Number of Options (Employees)			Number of Options (Non-Employees)			Total Number of Options			Weighted-Average Exercise Price
Outstanding at January 1, 2020		7,126,340			615,000			7,741,340		$	3.32
Granted		—			—			—			—
Exercised		(4,300,000	)		(250,000	)		(4,550,000	)	$	0.26
Forfeited or expired		(3,570	)		—			(3,570	)	$	32.76
Outstanding at September 30, 2020		2,822,770			365,000			3,187,770		$	7.67
Exercisable at September 30, 2020		2,432,320			365,000			3,162,320		$	7.71

The following table summarizes significant ranges of outstanding stock options under our plans at September 30, 2020:

Range of Exercise Prices		Number of Options		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Number of Options Exercisable		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price
$	0.26 - $1.00		850,000		9.21	$	0.26		850,000		9.21	$	0.26
$	1.01 – $3.00		1,050,673		6.86	$	2.04		1,025,223		6.75	$	2.05
$	3.01 – $15.00		852,360		4.22	$	12.56		852,360		4.22	$	12.56
$	15.01 –$42.42		434,737		3.19	$	26.13		434,737		3.19	$	26.13
			3,187,770		6.28	$	7.67		3,162,320		8.24	$	7.71

The Company recorded stock compensation costs related to vesting of options during the period of $30,392 and $91,179, respectively, for the three and nine-month periods ended September 30, 2020, as compared to $75,406 and $226,224, respectively, for the three and nine-month periods ended September 30, 2019. As of September 30, 2020, there remained approximately $20,000 of unrecognized compensation expense related to unvested stock options granted to current employees, which we expect will be recognized over a weighted-average period of 0.16 years. The aggregate intrinsic value of the outstanding options and options vested as of September 30, 2020 was $0.3 million.

At September 30, 2020 and December 31, 2019, there were warrants outstanding to purchase 193,196 shares, at a weighted-average exercise price of $8.60, in each period. Outstanding warrants at September 30, 2020 had no intrinsic value as of the period then ended.

Restricted Stock

In December 2017, the Company granted to Steven Kriegsman, 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 Steven Kriegsman, 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 $56,885 and $169,419 respectively, for the three and nine-month periods ended September 30, 2020 as compared to $140,827 and $417,889 respectively, for the three and nine-month periods ended September 30, 2019. As of September 30,2020, there remained approximately $56,000 of unrecognized compensation expense related to the vesting of these shares.