7. Stock Based Compensation

We have a 2000 Long-Term Incentive Plan, which expired on August 6, 2010. As of March 31, 2017, there were approximately 0.5 million shares subject to outstanding stock options under this plan. No further shares are available for future grant under this plan.

We also have a 2008 Stock Incentive Plan under which 30 million shares of common stock are reserved for issuance. As of March 31, 2017, there were 16.5 million shares subject to outstanding stock options and 2.3 million shares outstanding related to restricted stock grants issued from the 2008 Stock Plan and 12.7 million shares available for future grant under this plan.

We follow ASC 718, Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees.

For stock options and stock warrants paid in consideration of services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50.

Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period, the value of these options, as calculated using the Black-Scholes option-pricing model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. Since the fair market value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense is subject to adjustment until the common stock options are fully vested.

The following table sets forth the total stock-based compensation expense resulting from stock options, restricted stock and warrants included in our unaudited interim statements of operations:

	Three Months Ended March 31,
	2017		2016
Research and development — employee	$	353,083	$	480,811
General and administrative — employee		549,782		657,050
Total employee stock-based compensation	$	902,865	$	1,137,861

Research and development — non-employee	$	—	$	—
General and administrative — non-employee		28,660		187,956
Total non-employee stock-based compensation	$	28,660	$	187,956

During the three-month period ended March 31, 2017, we granted no stock option or warrants, and during the corresponding 2016 period, we granted stock options to purchase 425,000 shares of our common stock and warrants to purchase 500,000 shares of our common stock at an average exercise price of $1.74. The fair value of the stock options and warrants was estimated using the Black-Scholes option-pricing model, based on the following assumptions:

	Three Months Ended March 31, 2017		Three Months Ended March 31, 2016
Risk-free interest rate		—		1.47	%
Expected volatility		—		76.3	%
Expected lives (years)		—		5 - 10
Expected dividend yield		—		0.00	%

We compute expected volatility based on the historical daily volatility of our publicly traded stock. We use historical information to compute expected lives. In the three-month period ended March 31, 2016, the contractual term and the expected life of the options and warrants granted were five to ten years. The dividend yield assumption of zero is based upon the fact we have never paid cash dividends and presently have no intention to do so. The risk-free interest rate used for each grant and issuance is equal to the U.S. Treasury rates in effect at the time of the grant and issuance for instruments with a similar expected life. Based on historical experience, for the three-month period ended March 31, 2016, we estimated an annualized forfeiture rate of 10% for options granted to our employees, 2% for options granted to senior management and 0% for warrants issued to non-employees. On January 1, 2017, the Company adopted ASU 2016-09 and made a policy election to recognize forfeitures as they occur. The adoption of ASU 2016-09 did not have a material impact to the Company's financial condition or results of operations. No amounts relating to stock-based compensation have been capitalized.

As of March 31, 2017, there remained approximately $3.9 million of unrecognized compensation expense related to unvested stock options granted to current employees, which we expect will be recognized over a weighted-average period of 1.12 years. Presented below is our stock option activity:

	Three Months Ended March 31, 2017
	Number of Options (Employees)			Number of Options (Non-Employees)		Total Number of Options			Weighted-Average Exercise Price
Outstanding at January 1, 2017		16,879,770			600,000		17,479,770		$	2.37
Granted		—			—		—		$	—
Exercised, forfeited or expired		(360,000	)		—		(360,000	)	$	3.24
Outstanding at March 31, 2017		16,519,770			600,000		17,119,770		$	2.35
Exercisable at March 31, 2017		11,108,079			600,000		11,708,079		$	2.85

The following table summarizes significant ranges of outstanding stock options under our plans at March 31, 2017:

Range of Exercise Prices		Number of Options		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Number of Options Exercisable		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price
$	0.43 - $1.50		4,432,500		9.70	$	0.44		1,330,704		9.71	$	0.44
$	1.51 – $2.50		8,752,604		7.58	$	2.26		6,469,375		7.26	$	2.22
$	2.51 – $4.00		960,670		6.88	$	2.88		934,004		6.86	$	2.87
$	4.01 – $32.55		2,973,996		5.78	$	5.32		2,973,996		5.78	$	5.32
			17,119,770		7.78	$	2.35		11,708,079		7.13	$	2.85

The aggregate intrinsic values of outstanding options and options vested as of March 31, 2017 were $40,825 and $11,340 respectively, which represents the excess of the aggregatve fair market value of the underlying common stock on March 31, 2017 of $0.44 per share over the aggregate price of the options.

At March 31, 2017 and December 31, 2016, there were warrants outstanding to purchase 32,394,217 and 32,502,790 shares, respectively, at a weighted-average exercise price of $0.68 in each period.

Restricted Stock

In December 2016, the Company granted to Steven Kriegsman, Chief Executive Officer, 2,325,581 shares of restricted common stock, pursuant to the 2008 Plan. This restricted stock vests in equal annual instalments over three years. The fair value of the restricted stock is based on the market price of the Company's shares on the grant date less the par value received as consideration. The fair value of the restricted stock on the grant date was $1,000,000. The Company recorded an employee stock-based compensation expense for restricted stock of $82,117 and $0 respectively, for the quarters ended March 31, 2017 and 2016.