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Equity-Based Compensation
 9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [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. Options granted in the nine months ended September 30, 2020 and 2019 were 400,000 and 39,267, respectively.

 

Stock option for employees’ activity during the nine months ended September 30, 2020 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, 2020     127,747     $ 29.61       6.41     $ —  
Granted     300,000       3.07       9.83       —  
Forfeited     (2,483 )     19.50       —       —  
Expired     (568 )     348.48       —       —  
Outstanding September 30, 2020     424,696     $ 10.50       8.64     $ —  
Vested and expected to vest September 30, 2020     424,696     $ 20.50       8.64     $ —  
Exercisable September 30, 2020     125,321     $ 11.18       6.13     $ —  

 

Unvested stock option activity for employees:

 

    Number of
Options		     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contractual
Term
(Years)		     Aggregate
Intrinsic
Value		  
Unvested January 1, 2020     68,283     $ 23.79       7.48     $ —  
Granted     300,000       3.07       9.83       —  
Vested     (68,908 )     6.26       —       —  
Unvested September 30, 2020     299,375     $ 7.06       9.68     $ —  

 

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, 2020     66,675     $ 24.09       5.47     $ —  
Granted     100,000       2.77       9.83       —  
Forfeited     —       —       —       —  
Expired     (104 )     104.29       —       —  
Outstanding September 30, 2020     166,571     $ 7,19       7.19     $ —  
Vested and expected to vest September 30, 2020     166,571     $ 7.19       7.19     $ —  
Exercisable September 30, 2020     31,661     $ 7.76       9.13     $ —  

 

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, 2020     66,675     $ 12.80       5.59     $ —  
Granted     100,000       2.77       9.83       —  
Expired     —       —       —       —  
Vested     (31,765 )     7.75       —       —  
Unvested September 30, 2020     134,910     $ 6.56       7.90     $ —  

 

Stock-based compensation expense was approximately $596,000 and $649,000 for the nine months ended September 30, 2020 and 2019 resulting in an increase in general and administrative expenses, respectively.

 

As of September 30, 2020, and 2019, respectively, there was approximately $1,080,000 and $877,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.