10. EQUITY INCENTIVE PLAN

The Company currently issues stock awards under its 2017 Stock Option and Incentive Plan, as amended (the "2017 Plan") which will expire on June 5, 2027. Per the terms of the 2017 Plan, the shares authorized for issuance under the 2017 Plan were 1,792,431 at March 31, 2021, of which 434,423 remain available for future grant. The shares authorized under the 2017 Plan are subject to annual increases on January 1 by 5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or such lessor number of shares determined by the Company’s Board of Directors or Compensation Committee. During the three months ended March 31, 2021, the shares authorized for issuance increased by 878,845 shares.

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 three months ended March 31, 2021, the Company granted stock options to purchase up to 591,097 shares of common stock at a weighted average exercise price of $2.16. The following table summarizes stock option activity under our plans during the three months ended March 31, 2021:


	Number of	Weighted-Average
	Options	Exercise Price
Outstanding at January 1, 2021	822,992	$	4.46
Granted	591,097		2.16
Forfeited	(55,993)		2.25
Outstanding at March 31, 2021	1,358,096	$	3.55
Exercisable at March 31, 2021	461,181	$	5.63

As of March 31, 2021, there were 1,133,868 options that were vested or expected to vest with an aggregate intrinsic value of $0.2 million and a remaining weighted average contractual life of 8.8 years.

During the three months ended March 31, 2020, there were 325,050 options granted with a weighted average exercise price of $2.09 and 13,267 options forfeited with a weighted average exercise price of $5.43.

For the three months ended March 31, 2021 and 2020, we recorded compensation expense for all stock awards of $0.4 million and $0.2 million, respectively, within operating expense in the accompanying statements of operations. As of March 31, 2021, the unrecognized compensation expense related to unvested stock awards was $2.3 million, which is expected to be recognized over a weighted-average period of 2.2 years.