Note

10.

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

six

months ended

June 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		-		-
Cancelled		-		-
Outstanding, June 30, 2019		748	$	24.95		6.2	$	188
Exercisable, June 30, 2019		530	$	33.93		5.7	$	188

A summary of the Company’s stock options as of

June 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		2.5		73
1.39	-	3.05		1.39		37		1.39		3.2		37
3.06	-	20.99		3.06		580		3.06		7.5		362
21.00	-	656.40		289.81		58		289.81		0.7		58
			$	24.95		748	$	24.95		5.7		530

The Company did

not

grant any stock options to employees during the

three

and

six

months ended

June 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

June 30, 2019

and

2018,

respectively, and

$136,000

and

$150,000

for the

six

months ended

June 30, 2019

and

2018,

respectively. As of

June 30, 2019,

unrecognized stock-based compensation expense related to employees totaled approximately

$395,000,

which is expected to be recognized over approximately

1.5

years.

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

$16,000

and

for the

three

months ended

June 30, 2019

and

2018,

respectively, and

$32,000

and

for the

six

months ended

June 30, 2019

and

2018,

respectively. As of

June 30, 2019,

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

$16,000,

which is expected to be recognized over a weighted-average period of

three

months.