Stock-based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-based Compensation

11. Stock-based Compensation

On June 12, 2018, the Company's stockholders approved the 2018 Equity Incentive Plan (the "2018 Plan") to replace the Company's 2015 Equity Incentive Plan (the "2015 Plan"). The 2018 Plan authorized the issuance of 50,000 shares of our common stock. In addition, up to 143,714 shares of our common stock previously reserved for issuance under the 2015 Plan became available for issuance under the 2018 Plan to the extent such shares were available for issuance under the 2015 Plan as of June 12, 2018 or subsequently cease to be subject to awards outstanding under the 2015 Plan, such as by expiration, cancellation, or forfeiture of such awards.

Options are generally issued with a price equal to no less than fair value at the date of grant. Options granted under the 2018 Plan generally vest immediately, or ratably over a two- to 36-month period coinciding with their respective service periods. Options under the 2018 Plan generally have a term of five years. Certain stock option awards provide for accelerated vesting upon a change in control.

As of December 31, 2019, the Company had 33,758 shares of common stock available for issuance under the 2018 Plan.

The Company measures the fair value of stock options with service-based and performance-based vesting criteria to employees, directors and consultants on the date of grant using the Black-Scholes option pricing model. The fair value of equity instruments issued to non-employees is re-measured as the award vests. The Black-Scholes valuation model requires the Company to make certain estimates and assumptions, including assumptions related to the expected price volatility of the Company's stock, the period under which the options will be outstanding, the rate of return on risk-free investments, and the expected dividend yield for the Company's stock.

The weighted-average assumptions used in the Black-Scholes option-pricing model used to calculate the fair value of options granted during the year ended December 31, 2018, were as follows:

	Employee	Non-Employee
Expected volatility	71.0%-79.8%	N/A
Expected dividend yield	—	N/A
Expected term (in years)	3.0-3.5	N/A
Risk-free interest rate	71.0%-79.8%	N/A

The weighted-average assumptions used in the Black-Scholes option-pricing model used to calculate the fair value of options granted during the year ended December 31, 2019, were as follows:

	Employee	Non-Employee
Expected volatility	76.4%-80.6%	N/A
Expected dividend yield	—	N/A
Expected term (in years)	3.0-6.0	N/A
Risk-free interest rate	1.63%-2.48%	N/A

Due to the Company's limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption was determined based on historical volatilities from traded options of biotech companies of comparable in size and stability, whose share prices are publicly available. The expected term of options granted to employees is calculated based on the mid-point between the vesting date and the end of the contractual term according to the simplified method as described in SEC Staff Accounting Bulletin 110 because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its awards have been outstanding. For non-employee options, the expected term of options granted is the contractual term of the options. The risk-free rate by reference to the implied yields of U.S. Treasury securities with a remaining term equal to the expected term assumed at the time of grant. The expected dividend assumption is based on the Company's history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends on its shares of capital stock.

The table summarizes the stock option activity, for both plans, for the periods indicated as follows:

	Number of Options			Weighted Average Exercise Price Share		Weighted Average Remaining Contractual Per Term (years)		Aggregate Intrinsic Value (1)
Outstanding at December 31, 2017		82,590		$	33.40		3.7	$	—
Granted		8,974		$	30.60		4.4	$	—
Exercised		(2,450	)	$	10.00
Forfeited		(2,525	)	$	—
Expired		(530	)	$	—
Outstanding at December 31, 2018		86,059		$	31.40		4.0	$	—
Granted		58,396		$	25.80		4.9	$	—
Exercised		(3,450	)	$	13.00		—	$	—
Forfeited		(3,445	)	$	—		—	$	—
Expired		(1,071	)	$	—		—	$	—
Outstanding at December 31, 2019		136,489		$	27.84		3.9	$	—
Exercisable at December 31, 2019		88,029		$	30.77		2.8	$	—

(1) The aggregate intrinsic value on the table was calculated based on the difference between the estimated fair value of the Company's stock and the exercise price of the underlying option. The estimated stock values used in the calculation was $11.00 and $11.70 per share for each of the years ended December 31, 2019 and 2018 respectively.

The weighted average grant date fair value of options granted to employees for the year Ended December 31, 2019 was $25.80 per share.

At December 31, 2019, the total compensation cost related to non-vested options not yet recognized was $1,005, which will be recognized over a weighted average period of 27 months, assuming the employees complete their service period required for vesting.

Restricted Stock Units

The following table summarizes restricted stock unit activity for the years ended December 31, 2019 and 2018:

	Number of			Weighted Average Grant Date Fair Value Per
	Units			Units
Outstanding as of December 31, 2017		14,395		$	37.20
Granted		3,787	(1)	$	32.40
Vested		(11,190	)	$	51.20
Forfeited		(179	)	$	139.80
Outstanding as of December 31, 2018		6,813		$	19.60
Granted		6,191	(2)	$	30.20
Vested		(7,127	)	$	22.00
Forfeited		—		$	—
Outstanding as of December 31, 2019		5,877		$	30.28

(1) 641 restricted stock units were granted on June 12, 2017 with a weighted average grant date fair value of $13.00 and 3,146 restricted stock units were granted on June 12, 2018 with a weighted average grant date fair value of $36.40

(2) 314 restricted stock units were granted on February 14, 2019 with a weighted average grant date fair value of $17.09. 3,877 restricted stock units were granted on June 18, 2019 with a weighted average grant date fair value of $28.40. 2,000 restricted stock units were granted on June 30, 2019 with a weighted average grant date fair value of $36.00.

The stock-based compensation expense was recorded as follows:

	Years Ended December 31,
	2019		2018
Research and development	$	14	$	106
General and administrative		859		3,306
Total stock-based compensation expense	$	873	$	3,412

The allocation between research and development and general and administrative expense was based on the department and services performed by the employee or non-employee.