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EQUITY INCENTIVE PLAN | 6 Months Ended
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Jun. 30, 2020
EQUITY INCENTIVE PLAN [Abstract] |
EQUITY INCENTIVE PLAN | 10. EQUITY INCENTIVE PLAN The Company's 2006 Equity Incentive Plan (the "2006 Plan") was terminated as to future awards on July 12, 2016. The Company's 2017 Stock Option and Incentive Plan (the "2017 Plan") was adopted by the Company's stockholders on June 5, 2017 and there were 44,444 shares of common stock reserved for issuance under the 2017 Plan. The 2017 Plan will expire on June 5, 2027. Amendment of the 2017 Stock Option and Incentive Plan On January 31, 2018, at a special meeting of the stockholders of the Company, the stockholders approved an amendment and restatement of the 2017 Plan to:
| · |  | increase the aggregate number of shares authorized for issuance under the 2017 Plan by 359,300 shares;
| · |  | increase the maximum number of shares that may be granted in the form of stock options or stock appreciation rights to any one individual in any one calendar year and the maximum number of shares underlying any award intended to qualify as performance-based compensation to any one individual in any performance cycle, in each case to 66,666 shares of common stock; and
| · |  | add an “evergreen” provision, pursuant to which the aggregate number of shares authorized for issuance under the 2017 Plan will be automatically increased each year beginning on January 1, 2019 by 5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or such lesser number of shares determined by the Company’s Board of Directors or Compensation Committee. Accordingly, the shares authorized for issuance under the 2017 Plan were increased by 394,905 shares and 114,937 shares on January 1, 2020 and 2019, respectively.
Stock Options. The Company accounts for all stock-based compensation payments to employees and directors, including grants of employee stock options, at fair value at the date of grant and expenses the benefit in operating expense in the condensed consolidated statements of operations over the service period of the awards. The Company records the expense for stock-based compensation awards subject to performance-based milestone vesting over the remaining service period when management determines that achievement of the milestone is probable based on the expected satisfaction of the performance conditions as of the reporting date. The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option pricing model, which requires various assumptions including estimating stock price volatility, expected life of the stock option, risk free interest rate and estimated forfeiture rate. During the six months ended June 30, 2020, the Company granted stock options to purchase up to 325,050 shares of common stock at a weighted average exercise price of $2.13. The following table summarizes stock option activity under our plans during the six months ended June 30, 2020:
|  | Number of |  | Weighted-Average
|  | Options |  | Exercise Price
Outstanding at January 1, 2020 |  | 490,330 |  | $ | 8.30
Granted |  | 325,050 |  |  | 2.13
Forfeited |  | (24,147) |  |  | 5.04
Outstanding at June 30, 2020 |  | 791,233 |  | $ | 5.87
Exercisable at June 30, 2020 |  | 277,941 |  | $ | 10.40
As of June 30, 2020, there were 662,910 options that were vested or expected to vest with an aggregate intrinsic value of zero and a remaining weighted average contractual life of 8.7 years. During the six months ended June 30, 2019, there were 285,364 options granted with a weighted average exercise price of $2.37 and 9,017 options forfeited with a weighted average exercise price of $6.92. For the three and six months ended June 30, 2020, we recorded compensation expense for all stock awards of $0.1 million and $0.3 million, respectively, within operating expense in the accompanying statements of operations. For the three and six months ended June 30, 2019, we recorded compensation expense for all stock awards of $0.1 million and $0.3 million, respectively. As of June 30, 2020, the unrecognized compensation expense related to unvested stock awards was $2.0 million, which is expected to be recognized over a weighted-average period of 2.1 years.

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