9. Accounting for Share‑Based Payments

On June 3, 2013, we adopted the 2013 Equity Incentive Plan (the “Plan”). Stock options granted under the Plan typically will vest after three years of continuous service from the grant date and will have a contractual term of ten years. Stockholder and Board approval was obtained on December 2, 2014 to increase the number of authorized shares to 11,607 and on December 14, 2016 Stockholder and Board approval was obtained to increase the number of authorized shares to 13,750. Stockholder and Board approval was obtained on February 21, 2018 to increase the number of authorized shares to 40,535. As of March 31, 2020, we had 0 shares of common stock available for grant under the Plan.

We classify stock-based compensation expense in our condensed consolidated statement of operations in the same way the award recipient's payroll costs are classified or in which the award recipients' service payments are classified. We recorded stock-based compensation expense as follows:


	Three Months Ended
	March 31,
	2020		2019
General and administrative	$	5,910	$	10,365
Research and development		2,336		7,141
Total stock-based compensation expense	$	8,246	$	17,506

A summary of stock option activity and of changes in stock options outstanding under the Plan is presented below:


							Weighted				Weighted
							Average				Average
	Number of	Exercise Price					Exercise Price		Intrinsic		Remaining
	Options	Per Share					Per Share		Value		Contractual Term
Balance outstanding, December 31, 2019	41,271	$	3.24	-	$	2,452.80	$	194.83	$	43,182	8.42	years
Granted	—		—	-	$	—	$	—	$	—
Forfeited	—		—		$	—	$	—		—
Cancelled	—	$	—	-	$	—	$	—		—
Balance outstanding, March 31, 2020	41,271	$	3.24	-	$	2,452.80	$	209.07	$	—	8.33	years
Vested awards and those expected to vest at March 31, 2020	39,913	$	3.24	-	$	2,452.80	$	216.06	$	—	8.30	years
Vested and exercisable at March 31, 2020	14,415	$	3.24	-	$	2,452.80	$	586.07	$	—	6.52	years

There were no options granted to employees during the three months ended March 31, 2020 and 2019, respectively. The total fair value of the shares vested during the three months ended March 31, 2020 was de minimis.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of our common stock for those stock options that had exercise prices lower than the fair value of our common stock.

As of March 31, 2020, the unrecognized compensation cost related to non-vested stock options outstanding, net of expected forfeitures, was approximately $0.1 million to be recognized over a weighted-average remaining vesting period of approximately 2.7 years.

The following weighted-average assumptions are used in the Black-Scholes valuation model to estimate fair value of stock option awards when granted to employees.

Risk‑free interest rate—Based on the daily yield curve rates for U.S. Treasury obligations with maturities which correspond to the expected term of our stock options.

Dividend yield— We have not paid any dividends on our common stock since inception and do not anticipate paying dividends on our common stock in the foreseeable future.

Expected volatility—Because we have a limited trading history in our common stock, we base expected volatility on that of comparable public development stage biotechnology companies.

Expected term—The expected option term represents the period that stock‑based awards are expected to be outstanding based on the simplified method provided in SAB No. 107, which SAB No. 107, options are considered to be “plain vanilla” if they have the following basic characteristics: (i) granted “at‑the‑money”; (ii) exercisability is conditioned upon service through the vesting date; (iii) termination of service prior to vesting results in forfeiture; (iv) limited exercise period following termination of service; and (v) options are non‑transferable and non‑hedgeable.

In December 2007, the SEC issued SAB No. 110, Share‑Based Payment, (“SAB No. 110”). SAB No. 110 was effective January 1, 2008 and expresses the views of the Staff of the SEC with respect to extending the use of the simplified method, as discussed in SAB No. 107, in developing an estimate of the expected term of “plain vanilla” share options in accordance with ASC 718. We will use the simplified method until we have the historical data necessary to provide a reasonable estimate of expected life in accordance with SAB No. 107, as amended by SAB No. 110. For the expected term, we have “plain‑vanilla” stock options, and therefore used a simple average of the vesting period and the contractual term for options granted as permitted by SAB No. 107.

Forfeitures—ASC 718 allows for the election of forfeitures to be estimated at the time of grant and revised if necessary, in subsequent periods if actual forfeitures differ from those estimates. At April 1, 2016, we determined that we had sufficient history of issuing stock options and decreased our estimated forfeiture rate from 10%, which was based on the historical experience of our former parent, to 3%, which is our actual historical forfeiture rate. The forfeiture rate was 10% through the end of the 3rd fiscal quarter ended March 31, 2016 and was the adjusted to 3% through the end of the fiscal year June 30, 2016 based on the aforementioned historical analysis. The forfeiture rate was 3% for the three months ended March 31, 2020 and 2019. We will continue to analyze the forfeiture rate on at least an annual basis or when there are any identified triggers that would justify immediate review.