The Company’s Board of Directors, or Board, and stockholders approved the 2019 Equity Incentive Plan, or the 2019 Plan, which became effective on September 12, 2019. The 2019 Plan is a successor to and continuation of all prior plans including the Company’s 2014 Equity Incentive Plan and Private Aravive’s 2017 Equity Incentive Plan and the 2010 Equity Incentive Plan, as amended (Prior Plans). As of December 31, 2019, the total number of shares of common stock available for issuance under the 2019 Plan was 1,391,697. In addition, if the shares subject to outstanding stock options or other awards under the Prior Plans: (I) terminate or expire prior to exercise or settlement; (II) are not issued because the award is settled in cash; (III) are forfeited because of failure to vest; (IV) or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, if any, such shares will become available for issuance under the 2019 Plan. Unless the Board provides otherwise, beginning January 1, 2020 with expiration of January 1, 2029, the total number of shares of common stock available for issuance will automatically increase annually on January 1 of each calendar year by 4.5% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year. The 2019 Plan provides for granting of equity awards to employees, directors and consultants, including incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance awards.

						Weighted
						Average
				Weighted		Remaining		Aggregate
				Average		Contractual		Intrinsic
	Number of			Exercise		Life		Value
	Shares			Price		(in years)		(in thousands)
Balances, January 1, 2018		607,511		$	81.60
Additional shares authorized		—			—
Assumption of option plans associated with the merger		1,183,950			0.44
Options granted		—			—
Restricted stock units granted		—			—
Options exercised		(3,643	)		9.66
Options cancelled		(271,895	)		80.09
Balances, December 31, 2018		1,515,923			18.65
Additional shares authorized		—			—
Options granted		483,328			5.55
Restricted stock units granted		—			—
Options exercised		(39,686	)		2.40
Options cancelled		(139,405	)		81.33
Balances, December 31, 2019		1,820,160		$	10.70		6.6	$	18,957
Vested and expected to vest as of December 31, 2019		1,796,997		$	10.75		6.6	$	18,778
Exercisable as of December 31, 2019		1,474,782		$	11.31		6.0	$	16,311

The intrinsic values of outstanding, vested and exercisable options were determined by multiplying the number of shares by the difference in exercise price of the options and the fair value of the common stock. The intrinsic value of stock options exercised during the years ended December 31, 2019 and 2018, was $0.4 million and none, respectively.

The following table summarizes information with respect to stock options outstanding and currently exercisable and vested as of December 31, 2019:

					Options Exercisable
	Options Outstanding				and Vested
			Weighted Average				Weighted Average
			Remaining				Remaining
Range of	Number		Contractual		Number		Contractual
Exercise Prices	Outstanding		Life (in Years)		Outstanding		Life (in Years)
$0.06-$0.06		86,867		1.5		86,867		1.5
$0.24-$0.24		621,098		5.4		621,098		5.4
$0.66-$0.90		451,632		7.8		451,632		7.8
$3.54-$5.83		385,673		8.8		110,828		8.8
$5.87-$191.76		274,890		5.8		204,357		5.8
		1,820,160				1,474,782

During the year ended December 31, 2019, the Company granted stock options to officers, directors and employees to purchase shares of common stock with a weighted-average grant date fair value of $4.69 per share. The fair value is being expensed over the vesting period of the options, which is usually 4 years on a straight-line basis as the services are being provided. No tax benefits were realized from options and other share-based payment arrangements during the periods. For the year ended December 31, 2018 the fair value assumptions noted below, were all related to the assumed fully vested stock options in accordance with the Merger. No options were granted during the year ended December 31, 2018.

As of December 31, 2019, total unrecognized employee stock-based compensation related to stock options granted was $2.0 million, which is expected to be recognized over the weighted-average remaining vesting period of 2.8 years.

The fair value of employee stock options was estimated using the Black-Scholes model with the following weighted-average assumptions:

The fair value of each grant of stock options was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.

Expected Volatility – Beginning in 2018, the Company had enough historical stock price information in order to value the options assumed in the Merger. The Company continues to utilize our historical stock prices in order to estimate the expected volatility.

Risk-Free Interest Rate – The risk-free rate assumption was based on the U.S. Treasury instruments with terms that were consistent with the expected term of the Company’s stock options.

Expected Dividend – The expected dividend assumption was based on the Company’s history and expectation of dividend payouts.

Expected Term – The expected term of stock options represents the weighted average period the stock options are expected to be outstanding. For option grants that are considered to be “plain vanilla”, the Company has opted to use the simplified method for estimating the expected term as provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average time-to-vesting and the contractual life of the options.

Fair Value of Common Stock – The fair value of the underlying common stock is based upon quoted prices on the Nasdaq Global Select Market.

Stock-based compensation expense, net of estimated forfeitures, is reflected in the statements of operations as follows (in thousands):

The board of directors adopted, and the Company’s stockholders approved, the 2014 Employee Stock Purchase Plan, or the ESPP, in March 2014. The ESPP became effective on March 20, 2014.

The maximum aggregate number of shares of common stock that may be issued under the ESPP per purchase period is 416 shares (which was adjusted for the reverse stock split that occurred in October 2018). In November 2019, the board of directors adopted a resolution to increase the maximum aggregate number of shares of common stock that may be issued under the ESPP per purchase period 2,500 shares, beginning with the offering period that starts in May 2020. Additionally, the number of shares of common stock reserved for issuance under the ESPP will increase automatically each year, beginning on January 1, 2015 and continuing through and including January 1, 2024, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year; and (ii) 50,000 shares of common stock (which was adjusted for the reverse stock split that occurred in October 2018). The board of directors may act prior to the first day of any calendar year to provide that there will be no January 1 increase or that the increase will be for a lesser number of shares than would otherwise occur. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP.

An employee may not be granted rights to purchase stock under the ESPP if such employee (i) immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of the Company’s common stock, or (ii) holds rights to purchase stock under the ESPP that would accrue at a rate that exceeds $25,000 worth of our stock for each calendar year that the rights remain outstanding.

The administrator may approve offerings with a duration of not more than 27 months, and may specify one or more shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of common stock will be purchased for the employees who are participating in the offering. The administrator, in its discretion, will determine the terms of offerings under the ESPP.

The ESPP permits participants to purchase shares of our common stock through payroll deductions with up to 15% of their earnings. The purchase price of the shares will be not less than 85% of the lower of the fair market value of our common stock on the first day of an offering or on the date of purchase. The fair value of the ESPP grants were immaterial for the years ended December 31, 2019 and 2018, respectively.

Restricted stock units are shares of common stock which are forfeited if the employee leaves the Company prior to vesting. These stock units offer employees the opportunity to earn shares of the Company’s stock over time, rather than options that give the employee the right to purchase stock at a set price. As a result of these restricted stock units, the Company recognized $1.4 million and $3.2 million, in compensation expense during the years ended December 31, 2019 and 2018, respectively. As all of the restricted stock vests through 2019 and beyond, the Company will continue to recognize stock-based compensation expense related to the grants of these restricted stock units. If all of the remaining restricted stock units that were granted in prior years vest, the Company will recognize approximately $0.7 million in compensation expense over a weighted average remaining period of 2 years. However, no compensation expense will be recognized for restricted stock units that do not vest.

A summary of the Company’s restricted stock activity is presented in the following tables:

				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Restricted Stock Units
Unvested at December 31, 2018		117,597		$	31.37
Granted		—			—
Vested		(59,567	)		31.37
Forfeited/canceled		(15,918	)		27.16
Unvested at December 31, 2019		42,112		$	32.97