10. Stock‑Based Compensation (in thousands)

Stock-based compensation expense was included in general and administrative and research and development costs as follows in the accompanying statements of comprehensive loss (in thousands):


	Year Ended
	December 31,
		2019		2018
Research and development	$	75	$	-
General and administrative		43		-
Total stock-based compensation	$	118	$	-

Stock Options

2018 Stock Plan

In December 2018, Private NeuroBo adopted the NeuroBo Pharmaceuticals, Inc. 2018 Stock Plan (the "2018 Plan") and in December 2019 in connection with the Merger, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”). 2018 Plan options to purchase Private NeuroBo common stock outstanding as of immediately prior to the Merger were assumed by the Company upon the Merger and became options to purchase the Company’s common stock, as adjusted by the Exchange Ratio. The 2018 Plan and 2019 Plan provide for the grant of stock options, restricted stock and other equity awards of the Company's common stock to employees, officers, consultants, and directors. Options expire within a period of not more than ten years from the date of grant. During the year ended December 31, 2019, 960,204 stock options were granted to employees and non-employee consultants with both service and performance conditions. The options granted with service conditions vest quarterly over a period between one year and fifteen months. There were no options granted under either plan during the year ended December 31, 2018.

As of December 31, 2019, 3,000,000 and 1,497,891 shares were authorized under the 2019 Plan and 2018 Plan, respectively, for issuance under these plans.

The following table summarizes the Company’s stock option plan activity for the years ended December 31, 2019 as follows:


				Weighted‑
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value(1)
	Options	Price		Term (years)	(in thousands)
Outstanding at December 31, 2018	—	$	—	—	$	—
Granted	960,204	$	0.63	—		—
Exercised	(1,143)	$	0.63	—		—
Forfeited/Cancelled	(325,784)	$	0.63	—		—
Outstanding at December 31, 2019	633,277	$	0.63	9.1	$	5,142
Vested and expected to vest at December 31, 2019	267,485	$	0.63	9.1	$	2,172
Options exercisable at December 31, 2019	231,478	$	0.63	9.1	$	1,880

⁽¹⁾

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock as of $8.75 per share at December 31, 2019.

The weighted average fair value per share of options granted during the year ended December 31, 2019 was $0.50.

The Company measures the fair value of stock options with service‑based and performance‑based vesting criteria to employees, consultants and directors on the date of grant using the Black‑Scholes option pricing model. The Company does not have history to support a calculation of volatility and expected term. As such, the Company has used a weighted‑average volatility considering the volatilities of several guideline companies.

For purposes of identifying similar entities, the Company considered characteristics such as industry, length of trading history, and stage of life cycle. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The average expected life of the options was determined based on the mid‑point between the vesting date and the end of the contractual term according to the “simplified method” as described in Staff Accounting Bulletin 110. The risk‑free interest rate is determined by reference to implied yields available from U.S. Treasury securities with a remaining term equal to the expected life assumed at the date of grant. The Company records forfeitures when they occur.

The weighted‑average assumptions used in the Black‑Scholes option‑pricing model are as follows:


	Year Ended
	December 31,
	2019

Expected stock price volatility		75.0	%
Expected life of options (years)		10.0
Expected dividend yield		0	%
Risk free interest rate		2.75	%

Evergreen provision

Under the 2019 Plan, the shares reserved automatically increase on January 1st of each year, for a period of not more than ten years commencing on January 1, 2020 and ending on (and including) January 1, 2029, to an amount equal to the lesser of 4% of the common shares outstanding as of January 1st , or a lesser amount as determined by the Board. The aggregate maximum number of shares of common stock that may be issued pursuant to the 2019 Plan under the evergreen provision is 6,680,000 shares of common stock. On January 1, 2020, 623,708 shares were added to the 2019 Plan as a result of the evergreen provision.

During the year ended December 31, 2019, 231,478 stock options vested. The weighted average fair value per share of options vesting during the year ended December 31, 2019 was $0.50. During the year ended December 31, 2019, 325,784 stock options were forfeited. As of December 31, 2019, 3,863,471 shares in the aggregate were available for future issuance under the 2019 Plan and 2018 Plan.

Unrecognized stock‑based compensation cost for the stock options issued under the both the Company’s 2019 Plan and 2018 Plan was $17 as of December 31, 2019. The unrecognized stock‑based expense is expected to be recognized over a weighted average period of 0.3 years.