Equity-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

Note 3: Equity-Based Compensation

The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. There were 2,933,627 and 669,619 options granted in the six months ended June 30, 2018 and June 30, 2017, respectively.

Stock option for employees’ activity during the six months ended June 30, 2018 is as follows:

Stock option activity for employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2018		1,203,918		$	5.91		6.89	$	—
Granted		2,933,627			0.35		—		—
Forfeited		(120,000	)		5.28
Expired		(15,833	)		12.00		—		—
Outstanding June 30, 2018		4,001,712		$	1.83		9.08	$	—
Vested and expected to vest June 30, 2018		4,001,712		$	1.83		9.08	$	—
Exercisable June 30, 2018		1,043,054		$	5.18		6.58	$	—

Unvested stock option activity for employees:

	Number of Options			Weighted Average Exercise Price		Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Unvested January 1, 2018		366,149		$	0.48		9.62	$	—
Granted		2,933,627			0.35		—		—
Vested		(341,118	)		0.40		—		—
Unvested June 30, 2018		2,958,658		$	0.36		9.69	$	—

Stock option activity for non-employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding January 1, 2018		834,876		$	2.70		6.69	$	—
Granted		1,156,152			0.34		—		—
Forfeited		(93,854	)		6.26		—		—
Expired		(14,250	)		32.77		—		—
Outstanding June 30, 2018		1,882,924		$	0.85		8.61	$	—
Vested and expected to vest June 30, 2018		1,882,924		$	0.85		8.61	$	—
Exercisable June 30, 2018		456,529		$	2.71		6.25	$	—

Unvested stock option activity for non-employees:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Unvested January 1, 2018		464,659		$	0.36		7.84	$	—
Granted		1,156,152			0.34		—		—
Vested		(194,416	)		0.39		—		—
Unvested June 30, 2018		1,426,395		$	0.34		9.20	$	—

Stock-based compensation expense was approximately $612,000 and $101,000 for the six months ended June 30, 2018 and 2017 resulting in an increase in general and administrative expenses and loss per share of $0.01 and $0.00, respectively.

As of June 30, 2018, and 2017, respectively, there was $1,278,000 and $405,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.