11. SHARE-BASED COMPENSATION, STOCK OPTIONS, AND RESTRICTED SECURITIES

In 2007, the Company’s Board of Directors adopted, and the Company’s shareholders subsequently approved, the 2007 Employee, Director and Consultant Stock Plan (the “2007 Plan”). The 2007 Plan provided that the Company’s Board of Directors (or committees and/or executive officers delegated by the Board of Directors) could grant incentive and nonqualified stock options to the Company’s employees, officers, directors, consultants and advisors.

On October 26, 2010, the Company’s Board of Directors adopted, and the Company’s shareholders subsequently approved, the 2010 Equity Incentive Plan (as subsequently amended, the “2010 Plan”). The 2010 Plan provides for grants of incentive stock options to employees, and nonqualified stock options and restricted Common Stock to employees, consultants, and non‑employee directors of the Company.

In April 2015, the Company’s Board of Directors adopted, and the Company’ shareholders subsequently approved, the 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for grants of incentive stock options to employees, and nonqualified stock, restricted Common Stock, restricted stock units and stock appreciation rights to employees, consultants, and directors of the Company.

Upon approval of the 2015 Plan by the Company’s shareholders on June 16, 2015, the 2010 Plan was terminated and no additional shares or share awards have been subsequently granted under the 2010 Plan. In March 2019, the Company’s Board approved, and recommended to the Company’s shareholders for approval, an amendment to the 2015 Plan (the “2015 Plan Amendment”), and on January 21, 2020, the Company’ shareholders subsequently approved the 2015 Plan Amendment. The 2015 Plan Amendment increased the maximum number of shares reserved for issuance under the 2015 Plan by 26,667 shares to a total of 32,000 shares. As of December 31, 2019, the total number of shares available to be issued under the 2015 Plan was 68 shares, consisting of, (i) 5,333 shares initially authorized under the 2015 Plan shares plus (ii) the shares that remained available for grant under the 2010 Plan at the time of its termination adjusted for cumulative cancellations, forfeitures and issuances from the 2010 Plan and 2015 Plan.

Options issued under the 2007 Plan, 2010 Plan, and 2015 Plan (collectively, the “Plans”) are exercisable for up to 10 years from the date of issuance.

In March 2015, the Company’s Board of Directors adopted, and the Company’s shareholders subsequently approved the ESPP. The ESPP allows employees to buy company stock twice a year through after-tax payroll deductions at a discount from market. The Company’s Board of Directors initially authorized 250 shares for issuance under the ESPP. Commencing on the first day of the year ended December 31, 2016 and on the first day of each year thereafter during the term of the ESPP, the number of shares of Common Stock reserved for issuance shall be increased by the lesser of (i) 1% of the Company’s outstanding shares of Common Stock on such date, (ii) 67 shares or (iii) a lesser amount determined by the Board of Directors. Under the terms of the ESPP, in no event shall the aggregate number of shares reserved for issuance during the term of the ESPP exceed 1,667 shares. As of December 31, 2019, there were 264 shares reserved for issuance under the ESPP.

The 2015 ESPP is considered a compensatory plan with the related compensation cost recognized over each respective 6 month offering period. During the year ended December 31, 2019, none of the Company’s employees participated in the ESPP plan and consequently no compensation expense was recorded. The compensation expense related to the ESPP for the year ended December 31, 2018 was $2 thousand.

Share‑based compensation

For the years ended December 31, 2019 and 2018, the Company recorded stock‑based compensation expense of $268 thousand and $618 thousand, respectively, net of forfeitures, inclusive of the expense related to the ESPP. Stock-based compensation recognized was classified in the consolidated statements of operations as follows:


(In thousands)	Year Ended December 31, 2019		Year Ended December 31, 2018
Research and development	$	94	$	183
General and administrative		174		435
Total	$	268	$	618

The fair value of each option award is estimated on the date of grant using the Black‑Scholes option pricing model, which uses the assumptions noted in the following table. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the financial statements, to estimate option exercises within the valuation model. The expected term of options granted under the Plans, all of which qualify as “plain vanilla,” is based on the average of the contractual term (10 years) and the vesting period (generally, 48 months). For non‑employee options, the expected term is the contractual term. The risk‑free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. The impact of forfeitures on compensation expense is recorded as they occur.

The assumptions used principally in determining the fair value of options granted were as follows:


	December 31,	December 31,
	2019	2018
Risk-free interest rate	2.55%	2.45 - 2.88%
Expected dividend yield	0%	0%
Expected term (employee grants)	6 Years	5.62 Years
Expected volatility	105%	104%

The Company grants restricted stock units, or RSUs, and RSAs, collectively referred to as restricted securities under its the 2015 Equity Incentive Plan. These restricted securities, generally vest over a three-year period, contingent on the recipient’s continued employment. Prior to vesting, all RSAs have the right to vote and receive dividends under the 2015 Equity Incentive Plan; however, the Company’s form of Restricted Stock Agreement provides that the payment of dividends on unvested RSAs shall be deferred until such time as the shares vest. The grant date fair value of these awards is based on the fair market value of our Common Stock on the date of grant.

Stock Options

A summary of option activity as of December 31, 2019 and 2018 and changes for the year then ended are presented below:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
Options	Shares	Price		Term in Years	Value
Outstanding at December 31, 2017	4,570	$	4,845.94	7.14	$	22
Granted	520	$	148.08
Expired	(180)	$	5,130.40
Cancelled/Forfeited	(3,052)	$	5,166.77
Outstanding at December 31, 2018	1,858	$	2,976.58	7.32	$	—
Granted	3,000	$	45.90
Expired	(85)	$	6,794.12
Cancelled/Forfeited	(586)	$	1,195.25
Outstanding at December 31, 2019	4,187	$	1,077.78	8.17	$	—
Vested and Exercisable at December 31, 2019	1,000	$	3,874.14	5.63	$	—

The weighted average grant‑date fair value of options granted during the years ended December 31, 2019 and 2018 was $37.46 and $114.60 per share, respectively. The total fair value of options that vested in years ended December 31, 2019 and 2018, was $135 thousand and $952 thousand respectively. For the years ended December 31, 2019 and 2018, the Company recorded stock-based compensation expense of $165 thousand and $528 thousand respectively. As of December 31, 2019, there was $180 thousand of total unrecognized compensation expense related to non‑vested share‑based option compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a remaining weighted-average period of 1.63 years at December 31, 2019.

Restricted Securities

The following table summarizes the restricted securities activity under the 2015 Equity Incentive Plan for the years ended December 31, 2019 and 2018:


		Weighted-Average
Restricted Securities	Number of Grants	Grant Date Fair Value
Unvested balance at December 31, 2017	670	$	767.16
Granted	—		—
Vested/Released	(143)	$	734.70
Forfeited	(184)	$	934.10
Unvested balance at December 31, 2018	343	$	693.17
Granted	6,886	$	15.59
Vested	(143)	$	734.70
Unvested balance at December 31, 2019	7,086	$	33.78

For the year ended December 31, 2019 and 2018, the Company recorded stock-based compensation expense of $103 thousand and $88 thousand respectively, related to the time-based restricted securities. As of December 31, 2019, total unrecognized compensation expense related to non-vested restricted securities amounted to $227 thousand which the Company expects to recognize over a remaining weighted-average period of 2.29 years. All the restricted securities that remain unvested and outstanding at December 31, 2019 are subject to time-based vesting.