On November 5, 2018, the Company’s Board authorized the establishment of a new series of preferred stock designated as Series D Preferred Stock, $0.01 par value, the terms of which are set forth in the certificate of designations for such series of Preferred Stock which was filed with the State of Delaware on November 5, 2018. On March 29, 2019, the Company exchanged all of its Series D Preferred Stock (with a stated value of $1,160,000) and received $400,000 in proceeds and issued a senior secured promissory note to an investor with a principal amount of $1,560,000.

During the three months ended March 31, 2019 the Company issued 4.1 million shares pursuant to the exercise of Pre-Funded Series D Warrants.

The Company’s 2019 Equity Incentive Plan (the “Plan”) allows for grants in the form of incentive stock options, nonqualified stock options, stock units, stock awards, stock appreciation rights, and other stock-based awards. All of the Company’s officers, directors, employees, consultants and advisors are eligible to receive grants under the Plan. The maximum number of shares authorized for issuance under the Plan is 1,500,000. Options to purchase shares of common stock are granted at exercise prices not less than 100% of fair value on the dates of grant. As of March 31, 2019, the Plan had approximately 333,333 shares available for grant.

The following is a summary of stock option activity under the Plan for the three months ended March 31, 2019:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018		—
Granted		1,250,000			0.28
Exercised		—
Cancelled/Forfeited		(83,333	)		0.28
Outstanding at March 31, 2019		1,166,667		$	0.28	9.08	$	—
Exercisable at March 31, 2019		112,498		$	0.28	8.43	$	—

The following weighted average assumptions were used to compute the fair value of stock options granted during the three months ended March 31, 2019:

	Three months ended March 31,
	2019
Dividend yield	N/A
Expected volatility		147.6	%
Weighted average risk-free interest rate		2.6	%
Weighted average expected life (in years)		5.5
Weighted average grant date fair value	$	0.259

For the three months ended March 31, 2019, the Company recognized compensation expense of approximately $54,000 relating to stock options granted to employees. For the same period in 2018, the Company recognized compensation expense of approximately $7,000.

For the three months ended March 31, 2019 the Company recognized compensation expense of approximately $4,000 relating to restricted stock granted to consultants. For the same period in 2018, the Company recognized compensation expense of approximately $14,000 related to restricted stock granted to employees.

The following is a summary of warrant activity for the three months ended March 31, 2019:

	Warrants			Exercise Price per Share	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)
Outstanding at December 31, 2018		65,685,269		$0.01 - $10.00	$	0.22		5.75
Exercised		(4,119,500	)			0.01
Expired		—				—
Outstanding at March 31, 2019		61,565,769		$0.01 - $10.00	$	0.23		5.49