11.STOCK-BASED COMPENSATION

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 provided 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’s 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 options, restricted common stock, restricted stock units (“RSUs”), and stock appreciation rights to employees, consultants, and non-employee 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 March 31, 2020, the total number of shares available to be issued under the 2015 Plan was 26,735 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 plus, (iii) the 26,667 shares approved for increase during the January 2020 shareholders meeting.

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 per 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 both March 31, 2020 and December 31, 2019, there were 264 shares reserved for issuance under the ESPP.

In January 2019, 36 shares that were purchased in the offering period commencing on July 1, 2018 and ending on December 31, 2018 were issued under the ESPP. The ESPP is considered a compensatory plan with the related compensation cost recognized over each 6 month offering period. None of the Company’s employees participated in the ESPP plan in the current offering period and consequently no compensation expense was recorded during three month period ended March 31, 2020.

Stock-based compensation

For the three month periods ended March 31, 2020 and 2019, the Company recorded stock-based compensation expense of $70 thousand and $67 thousand, respectively. Stock-based compensation recognized was classified in the consolidated statements of operations as follows:


(In thousands)	Three Months Ended March 31, 2020		Three Months Ended March 31, 2019
Research and development	$	20	$	24
General and administrative		50		43
Total	$	70	$	67

The fair value of each option award is estimated on the date of grant using the Black‑Scholes option pricing model, which uses the following assumptions; (i) Risk-free interest rate, (ii) Expected dividend yield, (iii) Expected term and (iv) Expected volatility. 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 Company grants RSUs and restricted stock awards (“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.

The Company did not grant any awards during the three months ended March 31, 2020. The assumptions used principally in determining the fair value of options granted during the three months ended March 31, 2019 were as follows:


		March 31,
		2019
Risk-free interest rate		2.55%
Expected dividend yield		0%
Expected term (employee grants)		6 Years
Expected volatility		105%

Stock options

A summary of option activity as of March 31, 2020 and changes for the three month period 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, 2019	4,187	$	1,077.78	8.17	$	—
Granted	—	$	—
Expired	—	$	—
Cancelled/Forfeited	—	$	—
Outstanding at March 31, 2020	4,187	$	1,077.78	7.90		—
Vested and Exercisable at March 31, 2020	2,036	$	2,024.87	7.08		—

The total fair value of options that vested in the three months ended March 31, 2020 was $56 thousand. For the three month periods ended March 31, 2020 and 2019, the Company recorded stock-based compensation expense of $43 thousand and $41 thousand, respectively related to stock options. As of March 31, 2020, total unrecognized compensation expense related to non-vested share-based option compensation arrangements amounted to $137 thousand and is estimated to be recognized over a period of 1.46 years.

Restricted Securities

The following table summarizes the restricted securities activity under the 2015 Plan during the three month period ended March 31, 2020:


		Weighted-Average
Restricted Securities	Number of Grants	Grant Date Fair Value
Unvested balance at December 31, 2019	7,086	$	33.78
Granted	—	$
Vested	—	$
Unvested balance at March 31, 2020	7,086	$	33.78

For the three month periods ended March 31, 2020, and 2019, the Company recorded stock-based compensation expense of $27 thousand and $26 thousand, respectively, related to the time-based restricted securities. As of March 31, 2020, total unrecognized compensation expense related to non-vested restricted securities amounted to $200 thousand which the Company expects to recognize over a remaining weighted-average of 2.06 years. All the restricted securities that remain unvested and outstanding at March 31, 2020 are subject to time-based vesting.