On May 15, 2018, the Company’s Board of Directors authorized and approved the adoption of the 2018 Omnibus Incentive Plan (“2018 Plan”), under which an aggregate of 5,356,114 shares may be issued. This share reserve is the sum of 3,000,000 new shares, plus the remaining 2,356,114 shares that remained available for issuance under the Company’s 2016 Omnibus Incentive Plan, the predecessor incentive plan (the “2016 Plan”) at the time of the adoption of the 2018 Plan. Pursuant to the terms of the 2018 Plan, the Company is authorized to grant stock options, as well as awards of stock appreciation rights, restricted stock, unrestricted shares, restricted stock units (“RSU”), stock equivalent units and performance-based cash awards. These awards may be granted to directors, officers, employees and eligible consultants. Vesting and the term of an option is determined at the discretion of the Company’s Board of Directors. Subsequent to the adoption of the 2018 Plan, the Company ceased granting awards under the 2016 Plan, the predecessor incentive plan. However, outstanding stock options granted prior to the effective date of the 2018 Plan are still governed by the 2016 Plan or the Company’s 2014 Stock Incentive Plan, which preceded the 2016 Plan.

As of December 31, 2018, there were an aggregate of 4,775,711 shares of common stock remaining available for grant under the Company’s 2018 Plan.

For the year ended December 31, 2018, the Company issued 996,406 stock options to employees and directors of which 53,503 were forfeited. In addition, the Company issued 15,000 stock options to consultants.

The following is a summary of stock option activity for the year ended December 31, 2018 and 2017:

				Weighted Average		Aggregate
				Exercise Price		Intrinsic Value
	Number of Options			in CAD$		in CAD$
Outstanding as of December 31, 2016		1,969,000		$	6.00	$	8,218
Granted		868,902			11.15
Forfeited		(153,067	)		11.45
Cancelled		(62,689	)		13.75
Exercised ⁽¹⁾		(173,500	)		5.15
Outstanding as of December 31, 2017		2,448,646		$	7.35	$	21,089
				in USD$		in USD$
Granted		1,011,406		$	10.12
Forfeited		(53,503	)		9.89
Exercised ⁽²⁾		(98,500	)		3.10
Outstanding as of December 31, 2018		3,308,049		$	7.14	$	8,308
Exercisable as of December 31, 2018		1,918,672		$	3.18	$	7,616

(1) For the year ended December 31, 2017, 20,000 stock options were exercised on a cashless basis resulting in 14,095 shares being withheld in satisfaction of the exercise price.
(2) For the year ended December 31, 2018, 8,500 stock options were exercised on a cashless basis resulting in 3,280 shares being withheld in satisfaction of the exercise price.

Upon the change in the Company’s functional currency effective April 1, 2018, stock options previously classified as equity were classified as liabilities. On April 1, 2018, these options had a fair value of approximately $10.0 million, which was recorded as stock-based compensation liability in the Company’s consolidated balance sheet, of which approximately $4.2 million was reclassified from additional paid-in capital and the remainder was recorded as additional stock-based compensation expense in the Company’s consolidated statement of operations and comprehensive loss. In June 2018, the Company’s Board of Directors’ approved the modification of all outstanding stock options with exercise prices denominated in CAD$ to convert the exercise prices of such options to USD$, subject to the consent of the holders of such options. On August 8, 2018, following the consent of option holders, the Company re-measured stock options for which all holders had consented to the modification and recorded $0.3 million reduction to stock-based compensation liability and reclassified $10.3 million from liability to equity. The incremental expense as a result of the modification was immaterial to the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2018.

The following table summarizes stock options outstanding and exercisable by employees and directors as of December 31, 2018:

			Options
			Outstanding
Number of			Remaining								Number of
Options			Contractual Life		Exercise		Fair Value		Grant Date		Options
Outstanding		Expiration Date	(In Years)		Price		Post Modification ⁽¹⁾		Fair Value		Exercisable
	360,000	June 18, 2019		0.46	$	2.77	$	6.62	$	—		360,000
	80,000	June 18, 2019		0.46	$	2.77	$	6.62	$	—		80,000
	20,000	December 8, 2019		0.94	$	12.72	$	2.18	$	—		20,000
	80,000	December 8, 2019		0.94	$	12.72	$	2.18	$	—		80,000
	20,000	March 16, 2020		1.21	$	12.52	$	2.43	$	—		20,000
	150,000	October 21, 2020		1.81	$	3.20	$	6.57	$	—		150,000
	20,000	December 31, 2020		2.00	$	4.48	$	5.86	$	—		20,000
	595,000	July 13, 2020		1.53	$	5.35	$	5.18	$	—		595,000
	20,000	August 8, 2020		1.60	$	4.98	$	5.42	$	—		20,000
	617,000	April 17, 2027		8.29	$	8.13	$	7.54	$	—		154,250
	6,146	May 18, 2027		8.37	$	7.35	$	4.75	$	—		4,610
	10,000	May 18, 2027		8.37	$	7.35	$	7.65	$	—		2,500
	30,000	August 8, 2027		8.60	$	10.38	$	7.38	$	—		7,500
	25,000	April 9, 2028		9.27	$	9.03	$	8.01	$	—		—
	337,500	May 15, 2028		9.37	$	10.99	$	7.89	$	—		85,313
	150,000	July 9, 2028		9.52	$	9.69	$	—	$	6.83		—
	75,726	August 22, 2028		9.64	$	10.23	$	—	$	7.21		—
	13,177	September 4, 2028		9.67	$	10.19	$	—	$	7.19		—
	50,000	September 10, 2028		9.69	$	10.34	$	—	$	7.30		—
	50,000	September 24, 2028		9.73	$	9.71	$	—	$	6.79		—
	1,500	October 8, 2028		9.76	$	8.25	$	—	$	5.84		—
	75,000	October 15, 2028		9.78	$	8.75	$	—	$	6.19		—
	100,000	October 22, 2028		9.80	$	10.16	$	—	$	7.20		—
	10,000	October 29, 2028		9.82	$	9.71	$	—	$	6.87		—
	20,000	November 19, 2028		9.88	$	8.00	$	—	$	5.66		—
	20,000	December 3, 2028		9.92	$	8.66	$	—	$	6.13		—
	15,000	December 17, 2028		9.96	$	9.42	$	—	$	6.66		—
	2,951,049											1,599,172

(1) Reflects fair value of modified stock options on August 8, 2018

As of December 31, 2018, the unrecognized compensation cost related to non-vested stock options outstanding for employees and directors was $8.3 million which will be recognized over a weighted-average remaining vesting period of 3.0 years.

During the fourth quarter of 2017, upon a review of the Company’s equity compensation awards granted under the 2016 Plan, the Company determined that it had inadvertently exceeded the annual per-person sub-limits involving an option award previously granted to a current executive officer. The aggregate amount of common stock represented by this excess award was 60,000 shares. This excess award was deemed to have been granted outside of the 2016 Plan and, as such, the Company applied liability accounting to the award. As a result, this excess award was to be re-measured at the end of each reporting period until such time that the Company’s stockholders approved the excess award, at which time the liability would be reclassified to equity. On June 28, 2018, the Company’s stockholders approved the excess award. On August 8, 2018, upon the modification of the exercise price of this stock option to convert such exercise price from CAD$ to USD$ as described above this excess award was re-measured again and reclassified from liability to equity for the portion of the option that had vested.

For the years ended December 31, 2018 and 2017, the Company granted 996,406 and 673,902 stock options, respectively, to employees and directors at a weighted average exercise price of $10.12 and CAD$10.87, respectively. The fair value of employee and director stock options granted for the years ended December 31, 2018 and 2017 had a weighted average grant date fair value of $7.78 and CAD$4.34 per option, respectively, and they were estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:

For the years ended December 31, 2018 and 2017, the Company granted 15,000 and 195,000 stock options, respectively, to consultants at a weighted average exercise price of $10.23 and CAD$12.20, respectively. Stock options granted to the Company’s consultants for the years ended December 31, 2018 and 2017 had a weighted average grant date fair value of $8.87 and CAD$3.88 per share, respectively, and they were estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:

The following table summarizes stock options outstanding and exercisable by consultants as of December 31, 2018:

			Options
			Outstanding
Number of			Remaining								Number of
Options			Contractual Life		Exercise		Fair Value		Grant Date		Options
Outstanding		Expiration Date	(In Years)		Price		Post Modification ⁽¹⁾		Fair Value		Exercisable
	80,000	June 18, 2019		0.46	$	2.77	$	6.62	$	—		80,000
	30,000	December 8, 2019		0.94	$	12.72	$	2.18	$	—		30,000
	72,000	October 3, 2020		1.76	$	5.15	$	5.35	$	—		72,000
	110,000	October 28, 2020		1.82	$	3.18	$	6.59	$	—		110,000
	20,000	May 18, 2027		8.37	$	7.35	$	7.65	$	—		5,000
	15,000	August 8, 2027		8.60	$	10.38	$	7.38	$	—		3,750
	15,000	November 6, 2027		8.84	$	16.20	$	6.98	$	—		3,750
	15,000	August 22, 2028		9.64	$	10.23	$	—	$	8.87		15,000
	357,000											319,500

(1) Reflects fair value of modified stock options on August 8, 2018

As of December 31, 2018, the unrecognized compensation cost related to non-vested stock options outstanding for consultants was $0.1 million which will be recognized over a weighted-average remaining vesting period of 2.6 years.

During the third quarter of 2018, following the redenomination of the exercise prices of stock options from CAD$ to USD$, stock options awarded to consultants that are performing services for NHC ceased to be accounted for as derivative financial instruments. As a result, following the re-measurement of stock options granted to the Company’s consultants on August 8, 2018, all vested stock options granted to these consultants were reclassified from liability to equity.

The following table summarizes non-employee stock options that had been accounted for as derivative financial instruments during the years ended December 31, 2018 and 2017 (amounts in thousands):

The fair value of non-employee stock options previously classified as liabilities and recorded as derivative financial instruments which were subsequently reclassified to equity following the modification of stock option previously on August 8, 2018 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions as of August 8, 2018 and December 31, 2017:

During the second quarter of 2017, the Company granted RSUs to certain employees under the 2016 Plan that were scheduled to vest over a three-year period, with 25% vesting immediately. The fair value of the RSUs was based on the closing price of the Company’s common stock on the date of grant.

The following is a summary of the Company’s RSU activity for the year ended December 31, 2018 and 2017:

Stock-based compensation expense is classified in the Company’s consolidated statements of operations and comprehensive loss as follows (amounts in thousands):