Note 15 – Stock-Based Compensation

Effective June 4, 2019, the Company’s stockholders approved amendments to the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2019 Equity Plan”). Among other things, the amendments increased the number of shares of common stock authorized for issuance under the 2019 Equity Plan by 2,300,000 shares to a new maximum aggregate limit of 7,073,922 shares. As of September 30, 2019, the Company had 2,589,077, remaining shares available for issuance under the 2019 Equity Plan.

Stock-based compensation cost was $0.3 million for each of the three months ended September 30, 2019 and 2018, respectively, and $1.0 million for each of the nine months ended September 30, 2019 and 2018, respectively. Stock-based compensation is included in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss).

Stock Option Activity

Changes in outstanding stock options during the nine months ended September 30, 2019 were as follows:

 

 

The fair value of options granted in the nine months ended September 30, 2019 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

 

 

A summary of the status of the Company’s non-vested stock options as of December 31, 2018 and September 30, 2019 and changes during the nine months then ended, is presented below:

 

 

As of September 30, 2019, there are 579,402 milestone-based options outstanding, and there is approximately $0.7 million of unrecognized compensation cost related to these milestone-based options. These options vest based on the achievement of Company and individual objectives as set by the Board.

As of September 30, 2019, there is approximately $0.4 million of total unrecognized compensation cost related to non-vested awards, which will be recognized over a weighted-average period of 3.0 years.

Restricted Stock Unit Activity

The Company issues restricted stock units (“RSUs”) under the 2019 Equity Plan. The fair value of these RSUs is determined based upon the closing fair market value of the Company’s common stock on the grant date.

A summary of the status of RSUs and changes during the nine months ended September 30, 2019 is presented below:

 

 

As of September 30, 2019, 150,000 RSUs subject to performance-based vesting were still outstanding. As of September 30, 2019, the Company had approximately $1.8 million of total unrecognized compensation costs related to RSUs, which will be recognized over a weighted average period of 2.8 years.