6. Stock-Based Compensation

On February 20, 2018, the Board of Directors approved and adopted the 2018 Equity Inducement Plan (“2018 Plan”) which became effective on the same date. The Board of Directors approved an initial reserve of 1,100,000 shares of common stock to be used exclusively for individuals who were not previously employees or directors, or following a bona fide period of non-employment, as an inducement material to the individual entering into employment with the Company. Nonqualified stock options or restricted stock units may be granted under the 2018 Plan at the discretion of the Compensation Committee or the Board of Directors. The Company did not seek stockholder approval of the 2018 Plan pursuant to Nasdaq Rule 5635(c)(4).

The 2016 Equity Incentive Plan (“2016 Plan”) provides for an annual increase in the number of shares available for issuance thereunder, to be added on the first day of each fiscal year, beginning on January 1, 2017 and continuing through 2023, up to 4% of the outstanding number of shares of the Company’s common stock on the December 31 immediately prior to the date of increase, provided that an increase is only effective if the Company’s board of directors either confirmed the increase or approved the increase of a lesser number of shares prior to January 1 of each relevant year. As a result of this provision, on January 1, 2018 and January 1, 2017, an additional 666,807 and 537,233 shares, respectively, became available for issuance under the 2016 Plan.

As of June 30, 2018, the 2016 Plan had 203,906 shares available for future issuance.

During the three months ended June 30, 2018 and 2017, the Company issued an aggregate of 203,600 and 244,100 options to purchase common stock, respectively, under the 2016 Plan and 2018 Plan for an aggregate fair value of $1.5 million and $713,000, respectively.

During the six months ended June 30, 2018 and 2017, the Company issued an aggregate of 1,033,100 and 1,016,900 options to purchase common stock, respectively, under the 2016 Plan and 2018 Plan for an aggregate fair value of $5.4 million and $4.9 million, respectively.

There were no shares issued and sold under the Company’s 2016 Employee Stock Purchase Plan (“2016 ESPP”) during the three months ended June 30, 2018 and 2017. The Company issued and sold 30,937 shares for aggregate cash proceeds of $78,000 during the six months ended June 30, 2018 and 18,184 shares for aggregate cash proceeds of $78,000 during the six months ended June 30, 2017.

Total stock-based compensation expense related to the Company’s equity incentive plans, 2018 Plan, and 2016 ESPP was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Research and development	$	390	$	285	$	713	$	395
General and administrative		606		381		1,118		671
Total stock-based compensation expense	$	996	$	666	$	1,831	$	1,066

The following table summarizes the weighted-average Black-Scholes option pricing model assumptions used to estimate the fair value of stock options granted under the 2016 Plan and 2018 Plan, and the shares purchasable under the 2016 ESPP during the periods presented:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
2016 Plan and 2018 Plan
Expected term		5.70			5.96			5.95			5.99
Expected volatility		84	%		86	%		85	%		86	%
Risk-free interest		2.79	%		1.87	%		2.73	%		2.07	%
Dividend yield		0	%		0	%		0	%		0	%

2016 ESPP
Expected term		—			—			0.49			0.50
Expected volatility		—			—			69	%		79	%
Risk-free interest		—			—			2.00	%		0.68	%
Dividend yield		—			—			0	%		0	%