11. Stock-Based Compensation

2013 Equity Incentive Plan

In November 2013, the Company's board of directors and sole stockholder adopted the Jaguar Health, Inc. 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan allows the Company's board of directors to grant stock options, restricted stock awards and restricted stock unit awards to employees, officers, directors and consultants of the Company. Following the effective date of the IPO and after effectiveness of any grants under the 2013 Plan that were contingent on the IPO, no additional stock awards will be granted under the 2013 Plan. Outstanding grants continue to be exercisable, however, any unissued shares under the plan and any forfeitures of outstanding options do not rollover to the 2014 Stock Incentive Plan. There were 395 option shares outstanding at December 31, 2019.

2014 Stock Incentive Plan

Effective May 12, 2015, the Company adopted the Jaguar Health, Inc. 2014 Stock Incentive Plan (“2014 Plan”). The 2014 Plan provides for the grant of options, restricted stock and restricted stock units to eligible employees, directors and consultants to purchase the Company's common stock. The 2014 Plan that provides for automatic share increases on the first day of each fiscal year in the amount of 2% of the outstanding number of shares of the Company's common stock on last day of the preceding calendar year. The 2014 Plan replaced the 2013 Plan except that all outstanding options under the 2013 Plan remain outstanding until exercised, canceled or expired.

Stock Options and Restricted Stock Units (“RSUs”)

Activity under the 2013 Plan and the 2014 Plan is set forth below:


				Weighted		Weighted Average
	Shares	Stock		Average		Remaining	Aggregate
	Available	Options	RSUs	Stock Option		Contractual Life	Intrinsic
	for Grant	Outstanding	Outstanding	Exercise Price		(Years)	Value*
Outstanding at December 31, 2018	2,327	42,059	5,613	$	406.36	9.24	$	—
Additional shares authorized	4,338,197	—	—		—	—
Options granted	(4,481,764)	4,481,764	—		1.68	—		—
Options canceled	621,069	(621,148)	—		5.51	—		—
Outstanding at December 31, 2019	479,829	3,902,675	5,613	$	5.20	9.56	$	—
Exercisable at December 31, 2019		904,051		$	13.77	9.47	$	—
Vested and expected to vest at December 31, 2019		3,364,438		$	5.69	9.55	$	—

* Fair market value of Jaguar stock on December 31, 2019 was $0.80 per share.

The intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair market value of the Company's common stock for options that were in-the-money.

The weighted average grant date fair value of stock options granted was $1.54 and $111.88 per share during the years ended December 31, 2019 and 2018, respectively.

The number of options that vested in the years ended December 31, 2019 and 2018 was 944,821 and 12,590, respectively. The grant date weighted average fair value of options that vested in the years ended December 31, 2019 and 2018 was $ 3.12 and $172.07, respectively.

No options were exercised in the years ended December 31, 2019 and 2018.

The Company granted 2,993 inducement options in the fiscal year 2018 to new employees. These options are all non-statutory and were issued outside of the Company’s 2014 Stock Plan. The weighted average grant-date fair value of the options was $93.80 per share. Stock-based compensation expense related to the inducement stock for the years ended December 31, 2019 and 2018 was $92,506 and 52,577, respectively. There were 74 and 2,983 option shares outstanding at December 31, 2019 and 2018, respectively.

The Company has granted RSUs under both the 2013 Plan and the 2014 Plan. The units granted have varying vesting terms, including RSU’s that vest upon the occurrence of both a liquidity event and satisfaction of the service-based requirement. The stock-based compensation expense is based on the grant date fair market value of the Company’s common stock, and is amortized over the vesting period using the straight-line method, net of estimated forfeitures. There were 5,613 RSU’s outstanding at December 31, 2019 and 2018.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to stock options, inducement stock options and RSUs for the years ended December 31, 2019 and 2018, and are included in the consolidated statements of operations as follows:


	Year Ended
	December 31,
	2019		2018
Research and development expense	$	868,603	$	579,641
Sales and marketing expense		160,837		96,730
General and administrative expense		1,959,104		1,347,503
Total	$	2,988,544	$	2,023,874

As of December 31, 2019, the Company had $5,671,503 of unrecognized stock-based compensation expense for options and RSU’s, which is expected to be recognized over a weighted-average period of 2.3 years.

The fair value of options granted during the years ended December 31, 2019 and 2018, respectively, were calculated using the weighted average assumptions set forth below:


	Year Ended
	December 31,
	2019		2018
Weighted-average volatility	143.1 - 145.9	%	87.4 - 105.9	%
Weighted-average expected term (years)	5.0 - 5.8		5.1 - 5.8
Risk-free interest rate	1.5 - 1.9	%	2.6 - 2.9	%
Expected dividend yield	—		—