11. Stock Incentive Plans

2013 Equity Incentive Plan

Effective November 1, 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. As of June 30, 2020, there were 384 options outstanding.

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.

As of June 30, 2020, there were 4,455,101 options outstanding and 213,617 options available for grant.

2020 New Employee Inducement Award Plan

Effective June 16, 2020, the Company adopted the Jaguar Health, Inc. New Employee Inducement Award Plan (“2020 Inducement Award Plan”) and, subject to the adjustment provisions of the Inducement Award Plan, reserved 500,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Award Plan. The 2020 Inducement Award Plan provides for the grant of nonstatutory stock options, restricted stock units, restricted stock, and performance shares. The 2020 Inducement Award Plan was adopted without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the 2020 Inducement Award Plan are substantially similar to the Company’s 2014 Stock Incentive Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award rules. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, the only persons eligible to receive grants of equity awards under the Inducement Award Plan are individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company.

As of June 30, 2020, there were 3,318 options outstanding and 496,682 options available for grant.

Stock Options and Restricted Stock Units (“RSUs”)

The following table summarizes incentive plan activity for the six months ended June 30, 2020

(unaudited):


				Weighted		Weighted Average
	Shares	Stock		Average		Remaining	Aggregate
	Available	Options	RSUs	Stock Option		Contractual Life	Intrinsic
(in thousands, except share and per share data)	for Grant	Outstanding	Outstanding	Exercise Price		(Years)	Value*
Outstanding at December 31, 2019	479,829	3,902,675	5,613	$	5.20	9.56	$	—
Additional shares authorized	786,229	—	—		—	—		—
Options granted	(853,318)	853,318	—		0.45	—		—
Options canceled	297,559	(297,559)	—		3.75	—		—
Options canceled not rolled back into the 2013 Plan	—	(15)	—		—	—		—
Outstanding at June 30, 2020	710,299	4,458,419	5,613	$	4.39	9.12	$	31
Exercisable at June 30, 2020		1,549,977		$	9.31	8.85	$	—
Vested and expected to vest at June 30, 2020		4,030,402		$	4.71	9.10	$	28

*Fair market value of JAGX common stock on June 30, 2020 was $0.485 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.

No options were exercised in the six months ended June 30, 2020.

The weighted average grant date fair value of stock options granted was $0.41 and $17.05 per share during the six months ended June 30, 2020 and 2019, respectively.

The number of options that vested in the six months ended June 30, 2020 and 2019 was 702,364 and 10,598, respectively. The grant date weighted average fair value of options that vested in the six months ended June 30, 2020 and 2019 was $2.21 and $132.26, respectively.

Stock-Based Compensation

The following table summarizes stock-based compensation expense related to stock options, inducement stock options and RSUs for the three and six months ended June 30, 2020 and 2019, and are included in the condensed consolidated statements of operations as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
(in thousands)	(unaudited)				(unaudited)
Research and development expense	$	203	$	149	$	405	$	216
Sales and marketing expense		57		12		113		46
General and administrative expense		489		285		991		611
Total	$	749	$	446	$	1,509	$	873

As of June 30, 2020, the Company had $3,693,000 of unrecognized stock-based compensation expense for options, inducement options and restricted stock units outstanding, which is expected to be recognized over a weighted-average period of 1.64 years.

The estimated grant-date fair value of stock option grants for the six months ended June 30, 2020 and 2019 was calculated using the Black-Scholes - Merton option-pricing model using the following weighted-average assumptions:


	Six Months Ended
	June 30,
	2020		2019
	(unaudited)
Weighted-average volatility	150.1 - 172.4	%	108.3 - 108.5	%
Weighted-average expected term (years)	5.0		5.8
Risk-free interest rate	0.3 - 0.5	%	2.5 - 2.6	%
Expected dividend yield	—		—

401(k) Plan

The Company sponsors a 401(k) defined contribution plan covering all employees. There were no employer contributions to the plan from plan inception through June 30, 2020.