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Equity-Based Compensation | 6 Months Ended
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Jun. 30, 2020
Share-based Payment Arrangement [Abstract] |
Equity-Based Compensation | Equity-Based Compensation The number of shares of common stock reserved for issuance under the 2017 Equity Incentive Plan automatically increases on January 1 of each year, beginning on January 1, 2020, by the lesser of (i) 4,600,000 shares, (ii) 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or (iii) a lesser number of shares determined by the Compensation Committee of the Company’s Board. The Compensation Committee made the determination to increase the share reserve for the 2017 Equity Incentive Plan by 4,303,463 shares, effective January 1, 2020. As of June 30, 2020, the aggregate number of common stock options available for grant under the 2017 Equity Incentive Plan was 2,283,019. Equity-based compensation expense is classified in the statements of operations as follows:
| Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
| 2020 |  | 2019 |  | 2020 |  | 2019
Research and development expense | $ | 203 |  |  | $ | 103 |  |  | $ | 360 |  |  | $ | 224 |
General and administrative expense | 341 |  |  | 336 |  |  | 625 |  |  | 704 |
| $ | 544 |  |  | $ | 439 |  |  | $ | 985 |  |  | $ | 928 |
Unamortized equity-based compensation expense at June 30, 2020 was $4,893, which is expected to be amortized over a weighted-average period of 2.9 years. The Company utilizes the Black-Scholes option-pricing model to determine the fair value of common stock option grants. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model also requires the input of highly subjective assumptions. In addition to an assumption on the expected term of the option grants as discussed below, application of the Black-Scholes model requires additional inputs for which we have assumed the values described in the table below:
| Six Months Ended June 30, |  |
| 2020 |  | 2019
Expected term | 5.2 to 6.1 years |  | 5.3 to 6.1 years
Risk-free interest rate | 0.41% to 1.68%; weighted avg. 0.67% |  | 1.86% to 2.56%; weighted avg. 2.34%
Expected volatility | 81.0% to 85.8%; weighted avg. 83.8% |  | 83.2% to 86.7%; weighted avg. 84.4%
Forfeiture rate | 5 | % |  | 5 | %
Expected dividend yield | — | % |  | — | %
The expected term is based upon the “simplified method” as described in Staff Accounting Bulletin Topic 14.D.2. Currently, the Company does not have sufficient experience to provide a reasonable estimate of an expected term of its common stock options. The Company will continue to use the “simplified method” until there is sufficient experience to provide a more reasonable estimate in conformance with ASC 718-10-30-25 through 30-26. The risk-free interest rate assumptions were based on the U.S. Treasury bond rate appropriate for the expected term in effect at the time of grant. The expected volatility is based on calculated enterprise value volatilities for publicly traded companies in the same industry and general stage of development. The estimated forfeiture rates were based on historical experience for similar classes of employees. The dividend yield was based on expected dividends at the time of grant. The fair value of the underlying common stock and the exercise price for the common stock options granted during the six months ended June 30, 2020 and 2019 are summarized in the table below:
Common Stock Options Granted During Period Ended: | Fair Value of Underlying Common Stock |  | Exercise Price of Common Stock Option
Six months ended June 30, 2020 | $1.19 to $2.80; weighted avg. $1.85 |  | $1.19 to $2.80; weighted avg. $1.85
Six months ended June 30, 2019 | $2.78 to $2.80: weighted avg. $2.79 |  | $2.78 to $2.80: weighted avg. $2.79
The weighted-average grant date fair value of common stock options granted in the six months ended June 30, 2020 and 2019 was $1.29 and $1.99 per common stock option, respectively. A summary of common stock option activity as of the periods indicated is as follows:
| Options |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value (thousands)
Outstanding - December 31, 2019 | 5,697,714 |  |  | $ | 2.34 |  |  | 6.7 |  | $ | 4,625 |
Granted | 2,075,248 |  |  | 1.85 |  |  |  |  |
Exercised | (55,899) |  |  | 0.89 |  |  |  |  |
Forfeited | (18,750) |  |  | 2.78 |  |  |  |  |
Outstanding - June 30, 2020 | 7,698,313 |  |  | $ | 2.22 |  |  | 7.2 |  | $ | 4,738 |
Exercisable - June 30, 2020 | 4,372,185 |  |  | $ | 2.12 |  |  | 5.5 |  | $ | 3,351 |
Vested and Expected to Vest - June 30, 2020 | 7,442,992 |  |  | $ | 2.22 |  |  | 7.1 |  | $ | 4,613 |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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