In April 2017, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), as sales agent, pursuant to which the Company had the right to offer and sell, from time to time, through Cantor, shares of the Company’s common stock, par value $0.001 per share, by any method deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “ATM Offering”). In April 2017, the Company also filed a prospectus supplement (File No. 333-216977) with the SEC relating to the offer and sale of up to $20.0 million of common stock in the ATM Offering. In June 2017, the Company filed a first amendment to the prospectus supplement with the SEC to increase the amount of common stock that could be offered and sold in the ATM Offering under the Sales Agreement to $40.0 million in the aggregate, inclusive of the common stock previously sold in the ATM Offering prior to the date of the first amendment. In January 2018, the Company filed a second amendment to the prospectus supplement with the SEC to decrease the amount of common stock that could be offered and sold in the ATM Offering under the Sales Agreement to $23.0 million in the aggregate, inclusive of the common stock sold in the ATM Offering prior to the date of the second amendment. In February 2018, the Company and Cantor mutually agreed to terminate the Sales Agreement.

Prior to termination of the Sales Agreement, the Company sold 5,733,314 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $21.1 million, including 0.3 million shares of common stock sold for gross proceeds of $0.6 million during the first quarter ended March 31, 2018. After $0.6 million of sales commissions and $0.2 million of other offering expenses paid by the Company in connection with the ATM Offering, the Company’s aggregate net proceeds from the ATM Offering were approximately $20.2 million. Sales commissions and offering expenses have been recorded as a reduction of proceeds received in arriving at the amounts recorded in additional paid-in capital in the accompanying consolidated balance sheets as of December 31, 2018 and 2017.

In January 2018, the Company completed an underwritten public offering of 13,915,000 shares of its common stock at a price of $2.90 per share, including 1,815,000 shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company sold its common stock through an underwriting agreement with Leerink Partners LLC and Cantor as representatives of the underwriters for the offering. The aggregate net proceeds to the Company from the offering were approximately $37.7 million, after deducting the underwriting discounts and commissions and offering expenses.

Pursuant to the Company Amended and Restated Certificate of Incorporation, the Company is authorized to issue 200,000,000 shares of common stock at a par value of $0.001 per share. As of December 31, 2018, 28,585,449 shares were issued and outstanding. As of December 31, 2017, 13,929,763 shares were issued and outstanding.

Each share of common stock is entitled to one vote. The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, no liability for further call or assessment, and are not entitled to cumulative voting rights.

Shares of common stock repurchased by the Company are recorded as treasury stock and result in an increase of stockholders’ deficit on the consolidated balance sheets. Reacquired common shares may be retired by resolution of the Board of Directors and resume the status of authorized and unissued common shares. In January 2017, the Company’s Board of Directors retired 1,396 shares of treasury stock to be returned to the status of authorized and unissued shares of the Company’s common stock. There was no additional treasury stock activity for the years ended December 31, 2018 and 2017.

Pursuant to the Company’s certificate of incorporation the Company has been authorized to issue 10,000,000 shares of preferred stock, each having a par value of $0.001. The preferred stock may be issued from time to time in one or more series with the authorization of the Company’s Board of Directors. The Board of Directors can determine voting power for each series issued, as well as designation, preferences, and relative, participating, optional or other rights and such qualifications, limitations or restrictions thereof.

The Company incurs stock-based compensation expense relating to the grants under its equity incentive plans of RSUs and stock options to employees, non-employee directors and consultants of the Company and its affiliates and through its employee stock purchase plan. Amounts recognized in the accompanying consolidated statements of operations with respect to the Company’s stock-based compensation and employee stock purchase plan were as follows:

The Company initially established the 2001 Stock Option Plan (the “2001 Plan”), which included incentive and nonqualified stock options and restricted stock to be granted to directors, officers, employees, consultants and others. The 2001 Plan terminated, and no further awards were granted under the 2001 Plan upon the effective date of the Company’s 2011 Equity Incentive Plan (the “2011 Plan”).

In February 2014, the number of shares reserved under the 2011 Plan was increased to 20% of the total outstanding shares of the Company calculated on a fully diluted basis. The shares reserved under the 2011 Plan were required to be kept at that percentage with each subsequent equity financing. No new equity awards may be granted under the 2011 Plan.

On May 11, 2015, 940,112 shares were reserved for issuance under the Company’s 2014 Equity Incentive Plan (the “2014 Plan”), including 14,006 remaining shares reserved under the 2011 Plan. As of December 31, 2018, there were no shares available for issuance under the 2014 Plan. On January 1, 2019, an additional 1,143,417 shares were registered for issuance under the 2014 Plan pursuant to an evergreen provision contained in the 2014 Plan.

The Company’s Board of Directors determines the grant date for all awards granted under the 2014 Plan. The option exercise price of stock options granted is generally equal to the closing price of the Company’s common stock on the date of grant. All stock options granted have a ten-year term. The vesting period of stock options and RSUs is established by the Board of Directors but typically ranges between one and four years.

The following table summarizes stock option activity during the two-year period ended December 31, 2018:

	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at January 1, 2017		1,161,705		$	3.35	7.7		$	36,887
Granted		494,500			2.09
Exercised		(41,815	)	2.68				$	152,130
Forfeited		(81,676	)		2.64
Expired/Cancelled		(14,943	)		6.15
Balance at December 31, 2017		1,517,771		$	2.97		7.5	$	67,242
Granted		802,500			3.39
Exercised		(144,645	)		2.19			$	243,531
Forfeited		(66,428	)		3.24
Expired/Cancelled		(61,961	)		6.52
Balance at December 31, 2018		2,047,237		$	3.07		7.6	$	366,007
Vested and expected to vest at December 31, 2018		2,047,237		$	3.07		7.6	$	366,007
Exercisable at December 31, 2017		851,996		$	3.31		6.5	$	248
Exercisable at December 31, 2018		1,256,352		$	2.91		6.5	$	346,595

The weighted-average fair value of stock options granted was $2.29 and $1.14 for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, total unrecognized compensation cost related to stock option awards was approximately $1,675,285, which is expected to be recognized over approximately 3.04 years.

In June 2018, in connection with the retirement of two employees, the vesting of stock options covering 46,613 shares of common stock was accelerated and the post-termination exercise period for the employees’ options was extended to a one-year period from the termination date. As a result of this modification, the Company recorded incremental stock-based compensation expense of approximately $79,400 for the year ended December 31, 2018.

The fair value of each stock option granted has been determined using the Black-Scholes option pricing model. The material factors incorporated in the Black-Scholes model in estimating the fair value of the stock options granted for the periods presented were as follows:

In preparing its Black-Scholes option-pricing model fair value calculations, in accordance with ASU No. 2016-09, the Company does not estimate a forfeiture rate to calculate stock-based compensation. The Company uses judgment in evaluating the expected volatility and expected terms utilized for the Company’s stock-based compensation calculations on a prospective basis.

The following table summarizes RSU award activity during the two-year period ended December 31, 2018:

	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance at January 1, 2017		355,499		$	2.41
Granted		10,000			1.75
Vested		(336,333	)		2.47
Forfeited		(2,500	)		2.46
Balance at December 31, 2017		26,666		$	2.78
Granted		492,051			3.63
Released		(291,010	)		3.72
Balance at December 31, 2018		227,707		$	3.30
Vested and unissued at December 31, 2018		13,126		$	3.40

The weighted-average fair value of RSUs granted was $3.63 and $1.75 for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, total unrecognized compensation cost related to RSU awards was approximately $701,780, which is expected to be recognized over approximately 3.30 years.

Vested and unissued awards at December 31, 2018 represents RSU awards granted on August 16, 2018 for which the second vesting date was December 31, 2018, but for which issuance of awards occurred on the next business day, January 2, 2019.

In April 2015, the Company’s stockholders approved the 2014 Employee Stock Purchase Plan (“ESPP”), which became effective in May 2015. Initially, the ESPP authorized the issuance of up to 110,820 shares of common stock pursuant to purchase rights granted to the Company’s employees or to employees of any of the Company’s designated affiliates. The number of shares of common stock reserved for issuance automatically increases on January 1 of each calendar year, from January 1, 2016 to January 1, 2024 by the least of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (ii) 195,000 shares, or (iii) a number determined by the Company’s board of directors that is less than (i) and (ii). The ESPP enables participants to contribute up to 15% of such participant’s eligible compensation during a defined period (not to exceed 27 months) to purchase common stock of the Company. The purchase price of common stock under the ESPP is the lesser of: (i) 85% of the fair market value of a share of the Company’s common stock on the first day of an offering or (ii) 85% of the fair market value of the Company’s common stock at the applicable purchase date.

During the year ended December 31, 2018, employees purchased 39,993 shares at $1.57 per share, 35,805 shares at $1.57, and 4,176 shares at $2.81 per share at the end of each of the ESPP’s six-month purchase periods. During the year ended December 31, 2017, employees purchased 39,972 shares at $1.79 per share and 39,969 shares at $1.61 per share at the end of each of the ESPP’s six-month purchase periods. As of December 31, 2018, approximately 158,067 shares of the Company’s common stock were reserved for future issuance under the ESPP. On January 1, 2019, an additional 195,000 shares were registered for issuance pursuant to an evergreen provision contained in the ESPP.

The Company recognizes ESPP expense based on the fair value of the ESPP stock purchase rights, estimated for each six-month purchase period using the Black-Scholes option pricing model. The model requires the Company to make subjective assumptions, including expected stock price volatility, risk free rate of return and estimated life. The fair value of equity-based awards is amortized straight-line over the vesting period of the award.

The material factors incorporated in the Black-Scholes model in estimating the fair value of the ESPP awards for the periods presented were as follows:

In December 2015, the Board of Directors adopted a Stock Purchase Plan (the “Purchase Plan”) which allows directors, any individual deemed by the Board of Directors to be an officer for purposes of Section 16 of the Exchange Act, and anyone designated by the Board of Directors as eligible to participate in the Purchase Plan to purchase shares of the Company’s common stock from the Company at fair market value. The aggregate number of shares of common stock that may be issued under the Purchase Plan shall not exceed 250,000 shares of common stock, and a maximum of 7,500 shares of common stock may be purchased by any one participant on any one purchase date. The Board of Directors or an authorized committee must review and approve each individual request to purchase common stock under the Purchase Plan. Cash received from the sale of common stock by the Company to eligible participants for the year ended December 31, 2018 was $9,997 which resulted in the sale of 2,304 shares of the Company’s common stock at fair market value. Cash received from the sale of common stock by the Company to eligible participants for the year ended December 31, 2017 was $130,649 which resulted in the sale of 61,141 shares of the Company’s common stock at fair market value.