Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Stock-based Compensation [Abstract]

Stock-Based Compensation

8. Stock-Based Compensation

Stock Options

The following is a summary of the stock option activity for the six months ended June 30, 2018:

	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2017		266,884		$	19.57
Granted		173,336			3.97
Forfeited		(15,628	)		32.80
Outstanding, June 30, 2018		424,592		$	12.72

The weighted average grant-date fair value of stock options granted during the six months ended June 30, 2018 was $2.84. The fair value of each stock option was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions for stock options granted during the six months ended June 30, 2018:

Dividend yield	0.0	%
Expected volatility	83.96	%
Risk-free interest rate	2.34	%
Expected lives (years)	6.3

The risk-free interest rate is based on U.S. Treasury interest rates at the time of the grant whose term is consistent with the expected life of the stock options. The Company used an average historical stock price volatility based on an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms, as the Company did not have sufficient trading history for its common stock. Expected term represents the period that the Company’s stock option grants are expected to be outstanding. The Company elected to utilize the “simplified” method to estimate the expected term. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option.

Expected dividend yield was considered to be 0% in the option pricing formula since the Company had not paid any dividends and had no plans to do so in the future. The forfeiture rate was considered to be none as the options vest on a monthly basis.

The Company recognized $108,340 and $123,418 in stock-based option compensation expense for the three months ended June 30, 2018 and 2017, respectively and $242,147 and $245,142 in stock-based option compensation expense for the six months ended June 30, 2018 and 2017, respectively. The following table summarizes information about stock options outstanding at June 30, 2018:

Options Outstanding			Options Vested and Exercisable
6/30/2018	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price	Balance as of 6/30/2018	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price
424,592	8.5	$12.72	161,461	7.4	$24.06

As of June 30, 2018, the unrecognized stock-based compensation expense related to unvested stock options was $1,522,789, which is expected to be recognized over a weighted average period of approximately 17.31 months.

Restricted Stock

The Company recognized $31,097 and $19,686 in stock-based compensation expense for employees related to restricted stock awards during the three months ended June 30, 2018 and 2017, respectively, and $265,228 and $136,207in stock-based compensation expense for employees related to restricted stock awards during the six months ended June 30, 2018 and 2017, respectively. The Company recognized $802 and $10,500 in share-based compensation expense related to issuance of shares of restricted stock to non-employees (i.e., consultants) in exchange for services during the three months ended June 30, 2018 and 2017, respectively and $4,757 and $21,000 in share-based compensation expense related to issuance of shares of restricted stock to non-employees (i.e., consultants) in exchange for services during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, there were 62,207 restricted stock awards granted to employees and non-employees, all of which were unvested.

Total stock-based compensation expense, including restricted stock and stock options was $512,120 and $402,349 for the six months ended June 30, 2018 and 2017, respectively.