10. EQUITY INCENTIVE PLAN

The Company's 2006 Equity Incentive Plan (the "2006 Plan") was terminated as to future awards on July 12, 2016. The Company's 2017 Stock Option and Incentive Plan (the "2017 Plan") was adopted by the Company's stockholders on June 5, 2017 and there were 44,444 shares of common stock reserved for issuance under the 2017 Plan. The 2017 Plan will expire on June 5, 2027.

Amendment of the 2017 Stock Option and Incentive Plan

On January 31, 2018, at a special meeting of the stockholders of the Company, the stockholders approved an amendment and restatement of the 2017 Plan to:

increase the aggregate number of shares authorized for issuance under the 2017 Plan by 359,300 shares to 403,744 shares;

increase the maximum number of shares that may be granted in the form of stock options or stock appreciation rights to any one individual in any one calendar year and the maximum number of shares underlying any award intended to qualify as performance-based compensation to any one individual in any performance cycle, in each case to 66,666 shares of common stock; and

add an “evergreen” provision, pursuant to which the aggregate number of shares authorized for issuance under the 2017 Plan will be automatically increased each year beginning on January 1, 2019 by 5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or such lesser number of shares determined by the Company’s Board of Directors or Compensation Committee.

Stock Options.

The Company accounts for all stock-based compensation payments to employees and directors, including grants of employee stock options, at fair value and expenses the benefit in operating expense in the condensed consolidated statements of operations over the service period of the awards. The Company records the expense for stock-based compensation awards subject to performance-based milestone vesting over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions as of the reporting date. The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option pricing model, which requires various assumptions including estimating stock price volatility, expected life of the stock option, risk free interest rate and estimated forfeiture rate.

During the nine months ended September 30, 2019, the Company granted stock options to purchase up to 285,364 shares of common stock at a weighted average exercise price of $2.37. 100,000 of the stock options granted during the nine months ended September 30, 2019 were awards subject to performance-based milestone vesting.

The following table summarizes stock option activity under our plans during the nine months ended September 30, 2019:


	Number of	Weighted-Average
	Options	Exercise Price
Outstanding at January 1, 2019	224,895	$	15.90
Granted	285,364		2.37
Forfeited	(16,351)		7.22
Outstanding at September 30, 2019	493,908	$	8.30
Exercisable at September 30, 2019	122,074	$	17.92

As of September 30, 2019, there were 400,949 options that were vested or expected to vest with an aggregate intrinsic value of approximately $0.1 million and a remaining weighted average contractual life of 8.9 years.

During the nine months ended September 30, 2018, there were 224,365 options granted with a weighted average exercise price of $10.50 and 13,526 options forfeited with a weighted average exercise price of $32.40.

For the three and nine months ended September 30, 2019, we recorded compensation expense for all stock awards of $0.2 million and $0.5 million, respectively, within operating expense in the accompanying statements of operations. For the three and nine months ended September 30, 2018, we recorded compensation expense for all stock awards of $0.1 million and $0.3 million, respectively. As of September 30, 2019, the unrecognized compensation expense related to unvested stock awards was $2.0 million, which is expected to be recognized over a weighted-average period of 2.3 years.