8. Stock Based Compensation

We have a 2000 Long-Term Incentive Plan, which expired on August 6, 2010. As of September 30, 2017, there were approximately 0.1 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. As of September 30, 2017, there were 2.5 million shares subject to outstanding stock options and 0.4 million shares outstanding related to restricted stock grants options and 2.0 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. As a result, 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 and warrants included in our Condensed Statements of Operations:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017		2016
Research and development — employee	$	(124,405	)	$	455,341		$	507,211	$	1,443,347
General and administrative — employee		479,330			586,315			1,348,815		3,742,733
Total employee stock-based compensation	$	354,925		$	1,041,656		$	1,856,026	$	5,186,080

Research and development — non-employee	$	11,600		$	—		$	11,600	$	—
General and administrative — non-employee		32,581			(5,938	)		97,818		214,524
Total non-employee stock-based compensation	$	44,181		$	(5,938	)	$	109,418	$	214,524

During the nine-month period ended September 30, 2017, we granted stock options to purchase 35,000 shares of our common stock at an average weighted exercise price of $3.96. During the nine-month period ended September 30, 2016, we granted stock options to purchase 79,167 shares of our common stock and warrants to purchase 83,334 shares of our common stock at a weighted average exercise price of $11.34. In the nine-month period ended September 30, 2016, we amended the terms of stock options of a former executive in respect of a Retirement Agreement, resulting in a one-time expense of approximately $1.9 million. The fair value of the stock options was estimated using the Black-Scholes option-pricing model, based on the following assumptions:

	Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016
Risk-free interest rate		2.32	%		1.72	%
Expected volatility		90.7	%		74.9	%
Expected lives (years)	6 to 10				6
Expected dividend yield		0.00	%		0.00	%

Our computation of expected volatility is based on the historical daily volatility of our publicly traded stock. We use historical information to compute expected lives. In the nine-month period ended September 30, 2017, the contractual term of the options granted was 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 nine-month period ended September 30, 2016, we estimated annualized forfeiture rates of 10% for options granted to our employees, 2% for options granted to senior management and 0% for options granted to directors and non-employees and for warrants issued to non-employees Compensation costs will be adjusted for future changes in estimated forfeitures. We will record additional expense if the actual forfeitures are lower than estimated and will record a recovery of prior expense if the actual forfeiture rates are higher than estimated. On January 1, 2017, we 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 September 30, 2017, there remained approximately $1.7 million of unrecognized compensation expense related to unvested stock options granted to current and former employees, directors, to be recognized as expense over a weighted-average period of 0.89 years. Presented below is our stock option activity:

	Nine Months Ended September 30, 2017
	Number of Options (Employees)			Number of Options (Non-Employees)		Total Number of Options			Weighted-Average Exercise Price
Outstanding at January 1, 2017		2,813,295			100,000		2,913,295		$	14.22
Granted		31,667			3,334		35,001		$	3.96
Exercised, Forfeited or Expired		(412,645	)		—		(412,645	)	$	12.90
Outstanding at September 30, 2017		2,432,317			103,334		2,535,651		$	14.28
Options exercisable at September 30, 2017		1,956,450			103,334		2,059,784		$	16.02

The following table summarizes significant ranges of outstanding stock options under our plans at September 30, 2017:

Range of Exercise Prices		Total Number of Options		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Total Number of Options Exercisable		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price
$	2.46 - $9.00		635,787		9.23	$	2.70		328,075		9.26	$	2.76
$	9.06 – $15.00		1,266,229		7.05	$	13.50		1,099,463		6.89	$	13.38
$	15.06 – $24.00		158,207		6.45	$	17.28		156,818		6.44	$	17.22
$	24.06 –$195.30		475,428		5.49	$	30.90		475,428		5.49	$	30.90
			2,535,651		7.26	$	14.28		2,059,784		6.91	$	16.02

The aggregate intrinsic value of all outstanding options and vested options as of September 30, 2017 was $0 and $0, respectively, representing options with exercise prices of less than the closing fair market value of our common stock on September 30, 2017 of $2.46 per share.

There were 3,980,781 and 5,417,132 warrants outstanding at September 30, 2017 and December 31, 2016, respectively, at a weighted-average exercise price of $4.26 and $4.08.

Restricted Stock

In December 2016, the Company granted to our Chairman and Chief Executive Officer, 387,597 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 approximately $83,943 and $249,089 respectively, for the three and nine-month periods ended September 30, 2017 as compared to zero for the comparative 2016 periods.