6.	Stock Based Compensation

2018 Omnibus Incentive Plan

In June 2018, stockholders of the Company approved the Company’s 2018 Omnibus Incentive Plan (the “2018 Plan”). The 2018 Plan had previously been approved by the Company’s Board of Directors (the “Board”) and the Compensation Committee of the Board, subject to stockholder approval. The 2018 Plan became effective on June 13, 2018 and provided an additional 1,500,000 stock options, following receipt of the requisite stockholder approval. The 2018 Plan replaces the Company’s 2015 Stock Incentive Plan, as amended (the “2015 Plan”). All awards outstanding under the 2015 Plan will remain in effect in accordance with their respective terms.

The following table summarizes stock option activity under the Company’s equity incentive plans and related information:

	Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)
Outstanding — December 31, 2017		821,741		$	13.69		9.17
Options granted		282,200		$	16.83
Options exercised		(7,707	)	$	4.63
Options expired		(1,146	)	$	115.18
Options canceled/forfeited		(23,189	)	$	4.46
Outstanding — June 30, 2018		1,071,899		$	14.67		8.85
Exercisable — June 30, 2018		286,552		$	28.91		7.84

Valuation Assumptions

The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing formula and a single option award approach. Due to its limited history as a public company and limited number of sales of its common stock, the Company estimated its volatility considering a number of factors including the use of the volatility of comparable public companies. The expected term of options granted under the Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history and is 5.93 years based on the average between the vesting period and the contractual life of the option. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. This fair value is being amortized ratably over the requisite service periods of the awards, which is generally the vesting period.

The fair value of employee stock options was estimated using the following weighted-average assumptions for the six months ended June 30, 2018 and 2017:

	Six Months Ended June 30,
	2018			2017
Employee Stock Options:
Risk-free interest rate		2.48	%		1.45	%
Expected term (in years)		5.93			6.04
Dividend yield		—			—
Volatility		104.37	%		75.12	%
Weighted-average fair value of stock options granted	$	13.38		$	25.27

Total stock-based compensation recognized was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Research and development	$	137	$	15	$	252	$	35
General and administrative⁽¹⁾		414		96		904		196
Total stock-based compensation	$	551	$	111	$	1,156	$	231

(1)

2018 includes $0.1 million in modification stock-based compensation expense related to a Board member’s departure.

As of June 30, 2018, 1,597,021 shares of common stock were available for future grant and 1,071,899 options to purchase shares of common stock were outstanding. As of June 30, 2018, the Company had unrecognized employee stock-based compensation expense of $5.9 million, related to unvested stock awards, which is expected to be recognized over an estimated weighted-average period of 2.88 years.

2018 Employee Stock Purchase Plan

In June 2018, the Company’s stockholders approved the 2018 Employee Stock Purchase Plan (the “ESPP”). The 2018 ESPP had previously been approved by the Board and the Compensation Committee of the Board, subject to stockholder approval which became effective as of June 13, 2018. A total of 120,000 shares of common stock may be granted in accordance with the terms of the ESPP. As of June 30, 2018, no shares of common stock have been issued to employees participating in the ESPP and 120,000 shares are available for issuance under the ESPP.