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. On March 29, 2019, the Company exchanged all issued and outstanding shares of its Series D Preferred Stock (having an aggregate stated value of $1,160,000) and received $400,000 in cash proceeds in exchange for the issuance of the March 2019 Notes. Please see the discussion under Note 8 above.

During the six months ended June 30, 2019 the Company issued 7.9 million shares of the Company’s common stock pursuant to the exercise of Pre-Funded Series D Warrants that were issued in connection with the 2018 Notes discussed in Note 8 above.

In April 2019, the Company entered into an exchange agreement with an institutional investor with respect to warrants held by such investor (the “February 2018 Warrants”). The February 2018 Warrants were issued to several institutional investors as part of the Company’s February 2018 sale of the Company’s common stock and the issuance of warrants to purchase common shares. Pursuant to the exchange agreement, the Company issued 64,000 shares of the Company’s common stock (the “Exchange Shares”) in exchange for the February 2018 Warrants. The exchange resulted in a loss of approximately $6,000 which is recognized in the statement of operations.

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 reserved 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 June 30, 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 six months ended June 30, 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 June 30, 2019		1,166,667		$	0.28	8.8	$	—
Exercisable at June 30, 2019		399,998		$	0.28	9.2	$	—

The following weighted average assumptions were used to compute the fair value of stock options granted during the six months ended June 30, 2019:

	Six months ended June 30, 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

At June 30, 2019, there was approximately $0.2 million of total unrecognized compensation expense related to non-vested share-based compensation awards under the plans for employee and board stock option grants. The cost is expected to be recognized over a weighted average period of 0.6 years. For the three and six months ended June 30, 2019, the Company recognized share-based compensation expense of approximately $75,000 and $133,000 in the statement of operations, respectively. For the same periods in 2018, the Company recognized share-based compensation income of approximately $140,000 and $121,000 in the statement of operations, respectively.

	Three months ended June 30,					Six months ended June 30,
(in thousands)	2019		2018			2019		2018
Selling, general and administrative	$	58	$	(71	)	$	106	$	(58	)
Research and development		17		(69	)		27		(63	)
Total	$	75	$	(140	)	$	133	$	(121	)

The following is a summary of warrant activity for the six months ended June 30, 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		(7,898,853	)			0.01
Exchanged		(64,000	)
Outstanding at June 30, 2019		57,722,416		$0.01 - $10.00	$	0.23		5.24