Equity (Tables)

6 Months Ended

Jun. 30, 2020

Summary of Stock Options Outstanding and Exercisable

The following table summarizes the Company’s stock option activity under both the 2010 Plan and 2019 Plan:

		Weighted		Weighted Average
	Number of	Average		Remaining		Aggregate
	Options	Exercise Price		Contractual Life		Intrinsic Value
Outstanding at December 31, 2019	6,000,000	$	1.33	5.40	$	—
Granted	340,000	$	0.73
Exercised	(10,000)	$	0.51
Forfeited	(100,000)	$	1.70
Expired	(855,000)	$	1.65
Outstanding at June 30, 2020	5,375,000	$	1.18	6.06	$	219,000
Exercisable at June 30, 2020	4,888,000	$	1.25	5.74	$	152,000

The 100,000 stock options that were forfeited and the 855,000 stock options that expired as of June 30, 2020 were issued under the 2010 Plan, which was cancelled as noted above. Therefore, these forfeited and expired stock options were not added back to the 2019 Plan. The 10,000 stock options that were exercised were processed as a net exercise, where the total number of shares of common stock was reduced to cover the exercise price and tax obligations and, as such, the Company did not receive cash related to that stock option exercise.

Stock options outstanding at June 30, 2020 are summarized in the table below:

	Number of	Weighted		Weighted Average
	Options	Average		Remaining
Range of Exercise Prices	Outstanding	Exercise Price		Contractual Lives
$0.40 - $2.00	4,747,000	$	0.74	6.46
$2.01 - $5.00	440,000	$	3.05	2.93
$5.01 - $8.62	188,000	$	7.97	3.35
	5,375,000	$	1.18	6.06

Assumptions Used in Computing Fair Value of All Options Granted

The Company computes the fair value for all options granted or modified using the Black-Scholes option pricing model. To calculate the fair value of the options, certain assumptions are made regarding components of the model, including the fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to the valuation. The Company calculates its volatility assumption using the actual changes in the market value of its stock. Forfeitures are recognized as they occur. The Company’s historical option exercises do not provide a reasonable basis to estimate an expected term due to the lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method. The simplified method calculates the expected term as the average of the vesting term plus the contractual life of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The Company computed the fair value of options granted during the period ended June 30, 2020, using the following assumptions:

Expected volatility	130.73% - 131.18	%
Risk free interest rate	1.62% - 1.67	%
Expected term (years)	5.00 - 5.51

Summary of Stock-Based Compensation Expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Research and development expenses
Stock-based compensation	$	11,000	$	30,000	$	71,000	$	31,000
General and administrative expenses
Issuance of common stock for services		—		—		80,000		60,000
Stock-based compensation		53,000		43,000		206,000		69,000
Total stock-based compensation	$	64,000	$	73,000	$	357,000	$	160,000
Unrecognized expense at June 30, 2020	$	55,000
Weighted average remaining years to vest		0.26

2019 Stock plan

Stock Option Activity

The following table summarizes the activity of the 2019 Plan and the shares available for future equity awards as of June 30, 2020:

	2019 Plan
Total shares reserved for equity awards		10,000,000
Options granted during fiscal 2019		(144,000)
Options granted during fiscal 2020		(340,000)
Add back: expired, forfeited and/or cancelled equity awards		3,000
Remaining shares available for future equity awards		9,519,000