STOCK-BASED COMPENSATION

Under our stock option plans, our board of directors may grant restricted stock andoptions to purchase common shares to our key employees, officers, directors and consultants. We account for stock options in accordance with FASB ASC Topic 718, Compensation - Stock Compensation, with stock-based compensation expense amortized over the vesting period based on the fair value on the grant date utilizing a trinomial lattice model through 2018 and the Black Scholes model for grants in 2019 and 2020, both of which include a number of estimates that affect the amount of our expense.

We recognized approximately $1,049,000 in stock-based compensation expense during the three months ended March 31, 2020, as compared with $1,195,000 for the three months ended March 31, 2019.

The status of our stock options are summarized as follows:



	Number of options		Weighted average exercise price
Outstanding at December 31, 2019	3,966,858		$	4.67
Granted	1,274,900		8.18
Exercised	(15,631	)	5.42
Canceled and forfeited	(142,300	)	7.65
Outstanding at March 31, 2020	5,083,827		$	5.46

We allow employees to exercise stock-based awards by surrendering stock-based awards with a fair value of the stock-based awards exercised, referred to as net settlements. These surrenders are included in stock options exercised in the options rollforward above. For the three months ended March 31, 2020 and 2019, respectively, we received 1,924 and 83,819 options as payment in the exercise of 4,362 and 168,730 options.

Common shares required to be issued upon the exercise of stock options would be issued from our authorized and unissued shares. We calculated the fair value of issued options utilizing a Black Scholes model with an expected life calculated via the simplified method as we do not have sufficient history to determine actual expected life.



	2020 Grants
Option value	$8.18
Risk-free rate	1.7%
Expected dividend yield	—
Expected volatility	65.9%
Expected term (in years)	6