The Company’s Board of Directors (the “Board”) and stockholders approved the 2019 Equity Incentive Plan (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 (the “Prior Plans”). As of March 31, 2020, the total number of shares of common stock available for issuance under the 2019 Plan was approximately 1,650,133. 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 an expiration date 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, 2020		1,820,160		$	10.70
Options granted		383,107			11.47
Options cancelled		(23,463	)		52.69
Options exercised		(5,645	)		5.83
Balances, March 31, 2020		2,174,159		$	10.39		5.4	$	6,350
Outstanding and expected to vest as of March 31, 2020		2,121,788		$	10.41		5.4	$	6,346
Exercisable as of March 31, 2020		1,504,713		$	10.65		5.2	$	6,271

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 three months ended March 31, 2020, was $38,000.

During the three months ended March 31, 2020 and 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 $9.77 and $5.52 per share, respectively. 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.

As of March 31, 2020, total unrecognized employee stock-based compensation related to stock options granted was $4.8 million, which is expected to be recognized over the weighted-average remaining vesting period of 3.2 years.

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

	March 31,			March 31,
	2020			2019
Expected volatility		111.0	%		111.0	%
Risk-free interest rate		1.6	%		2.5	%
Dividend yield		0.0	%		0.0	%
Expected life (in years)		6.1			6.0

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 $0.2 million and $0.4 million in compensation expense during the three months ended March 31, 2020 and 2019, respectively. As all of the restricted stock vests through 2020 and beyond, the Company will continue to recognize stock-based compensation expense related to the grants of these restricted stock units. If all the remaining restricted stock units that were granted in prior years vest, the Company will recognize approximately $1.2 million in compensation expense over a weighted average remaining period of 3 years. However, no compensation expense will be recognized for restricted stock units that do not vest.