Note

11.

Stock Options

May 3, 2019,

in connection with the closing of the Merger, each outstanding Private Adynxx stock option, whether vested or unvested, was converted into a stock option to purchase shares of the Company’s common stock at the Exchange Ratio and, as a result, the Company issued options to purchase an aggregate of

690,058

shares of the Company’s common stock at exercise prices ranging from

$1.11

$3.06

per share.

Additionally, at the date of the Merger, Alliqua had outstanding employee options to purchase an aggregate of

57,822

shares of the post-Merger Company’s common stock at exercise prices ranging from

$21.00

$656.40

per share to former Alliqua option holders that were assumed as part of the merger. All Alliqua employees were terminated in connection with the Merger; however, such options have provisions that extend the expiration date beyond the employees’ termination date.

A summary of the Company’s stock option activity during the

nine

months ended

September 30, 2019

is as follows (in thousands, except exercise prices):

						Weighted
				Weighted		Average
				Average		Remaining
	Number of			Exercise		Life		Intrinsic
	Options			Price		In Years		Value
Outstanding, December 31, 2018		690		$	2.76
Alliqua options assumed in Merger		58			289.76
Exercised		-			-
Expired		(17	)		93.48
Outstanding, September 30, 2019		731		$	23.38		6.1	$	33

Exercisable, September 30, 2019		550		$	30.07		5.8	$	33

A summary of the Company’s stock options as of

September 30, 2019

is as follows (in thousands, except exercise prices):

			Options Outstanding				Options Exercisable
			Weighted				Weighted		Weighted
Range of			Average		Outstanding		Average		Average		Exercisable
Exercise			Exercise		Number of		Exercise		Remaining Life		Number of
Price			Price		Options		Price		In Years		Options

$1.11	-	$1.38	$	1.11		73	$	1.11		2.2		73
$1.39	-	$3.05	$	1.39		37	$	1.39		2.9		37
$3.06	-	$196.79	$	3.06		580	$	3.06		7.2		399
$196.80	-	$656.40	$	370.21		41	$	370.21		0.7		41
			$	23.38		731	$	30.07		5.8		550

The Company did

not

grant any stock options to employees during the

three

and

nine

months ended

September 30, 2019.

Stock-based compensation expense recorded in research and development and general and administrative expenses was

$68,000

and

$75,000

for the

three

months ended

September 30, 2019

and

2018,

respectively, and

$204,000

and

$225,000

for the

nine

months ended

September 30, 2019

and

2018,

respectively. As of

September 30, 2019,

unrecognized stock-based compensation expense related to employees totaled approximately

$327,000,

which is expected to be recognized over approximately

1.3

years.

Stock-based compensation expense recorded in exchange for services related to non-employee options was

$16,000

and

for the

three

months ended

September 30, 2019

and

2018,

respectively, and

$48,000

and

for the

nine

months ended

September 30, 2019

and

2018,

respectively. As of

September 30, 2019,

there was

unrecognized stock-based compensation expense related to unvested non-employees stock options.