10.	Stock Based Compensation

The following table summarizes stock option activity under the Company’s equity incentive plans and related information:

	Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (thousands)
Outstanding — December 31, 2015		146,634		$	147.45		5.51	$	16
Options granted		14,706		$	23.70				—
Fractional shares written off in connection with the merger⁽¹⁾		(4	)	$	—
Options canceled		(13,773	)		259.05
Options forfeited		(6,573	)	$	64.95
Outstanding — December 31, 2016		140,990		$	128.25		3.93		—
Options granted		742,000		$	4.56
Options canceled		(141	)		41.91
Options forfeited		(61,108	)	$	165.63
Outstanding — December 31, 2017		821,741		$	13.69		9.17	$	6,376
Exercisable — December 31, 2017		161,240		$	45.34
Vested and expected to vest — December 31, 2017		821,741		$	13.69
Shares Available to be granted — December 31, 2017		354,886

(1)

In connection with the merger, the Company assumed stock options covering an aggregate of 94,721 shares of common stock. The Company also assumed 190 shares of Restricted Stock Awards which vested in two equal annual installments beginning on December 31, 2015 and fully vesting on December 31, 2016 and excludes 4 aggregate fractional shares written off as a result of the conversion ratio applied to options assumed in the merger. Total stock-based compensation related to these restricted stock awards was $0.02 million for year ended December 31, 2016.

Valuation Assumptions

The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing formula and a single option award approach. Due to its limited history as a public company and limited number of sales of its common stock, the Company estimated its volatility considering a number of factors including the use of the volatility of comparable public companies. The expected term of options granted under the Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history and is 6.03 years based on the average between the vesting period and the contractual life of the option. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. This fair value is being amortized ratably over the requisite service periods of the awards, which is generally the vesting period. The weighted average grant date fair value of employee stock options was $4.01 for the year ended December 31, 2017 and was estimated using the following weighted-average assumptions for the years ended December 31, 2017 and 2016:

	Year Ended December 31,
	2017			2016
Employee Stock Options:
Expected term (in years)		6.03			6.14
Risk-free interest rate		2.03	%		1.53	%
Dividend yield		—			—
Volatility		110.29	%		76.59	%

Options Granted to Nonemployees

During the years ended December 31, 2017 and 2016, options to purchase 20,000 and 800 shares, respectively, of common stock were issued to consultants that vest over one to four years with a weighted-average exercise price of $4.69 and $20.40 per share, respectively. During the years ended December 31, 2017, and 2016, the Company recorded stock-based compensation expense attributable to these nonemployee stock awards of $0.02 million and $0.05 million, respectively.

The estimated grant-date fair values of the nonemployee stock options were determined using the Black-Scholes valuation model and the following assumptions:

	Year Ended December 31,
	2017			2016
Non-Employee Stock Options:
Contractual Life (in years)		9			10
Risk-free interest rate		2.35	%		2.39	%
Dividend yield		—			—
Volatility		111.55	%		101.12	%

Total stock-based compensation recognized was as follows (in thousands):

	Year Ended December 31,
	2017		2016
Research and development	$	699	$	185
General and administrative		164		450
Total stock-based compensation	$	863	$	635

As of December 31, 2017, 354,886 shares of common stock were available for future grant and 821,741 options to purchase shares of common stock were outstanding. As of December 31, 2017 the Company had unrecognized employee stock-based compensation expense of $3.2 million, related to unvested stock awards, which is expected to be recognized over an estimated weighted-average period of 2.9 years.