Annual report pursuant to Section 13 and 15(d)

Stock Based Compensation (Tables)

Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of stock-based compensation expense

The amount of stock-based compensation expense recognized for the years ending December 31, 2018 and 2017 was as follows:



	Year Ended December 31,
	2018		2017
Research and development	$	101,000	$	156,047
General and administrative	2,135,710		1,001,205
Sales and marketing	194,353		—
Total stock-based compensation	$	2,431,063	$	1,157,252

Summary of option activity

A summary of option activity with service-based vesting conditions for the year ended December 31, 2018 is as follows:



	Options Outstanding
	Number of shares		Weighted average exercise price		Grant date fair value of options		Weighted average remaining contractual term (in years)
Balance at December 31, 2017	2,823,489		$	3.93			7.29
Granted	1,639,860		$	3.85	$	3,737,728
Exercised	(243,115	)
Forfeited	(473,637	)	$	2.77	$	1,109,083
Balance at December 31, 2018	3,746,597		$	4.16			7.79
Exercisable at December 31, 2018	1,997,468		$	4.71			6.62

A summary of option activity with market-based vesting conditions for the year ended December 31, 2018 is as follows:



	Options Outstanding
	Number of shares	Weighted average exercise price		Weighted average remaining contractual term (in years)	Aggregate intrinsic value (1)
Balance at December 31, 2017	—
Granted	500,000	$	4.24
Balance at December 31, 2018	500,000	$	4.24	9.24	$	—
Exercisable at December 31, 2018	—

(1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount.

Schedule of fair value assumptions for options

The following table shows the assumptions used to compute stock-based compensation expense for stock options granted to employees and members of the board of directors under the Black-Scholes valuation model, and the assumptions used to compute stock-based compensation expense for market-based stock option grants under a Monte Carlo simulation:



	Year Ended December 31,
Service-based options	2018			2017
Risk-free interest rate	2.51%	—	3.01%	1.85%	—	2.38%
Expected term of options (in years)	5.0	—	6.25	5.0	—	6.25
Expected stock price volatility	55%	—	65%	55%	—	100%
Expected annual dividend yield	0%	—	0%	0%	—	0%
Market-based options
Risk-free interest rate	2.84%
Expected term of options (in years)	2.8
Expected stock price volatility	60%
Expected annual dividend yield	0%

Nonvested Restricted Stock Shares Activity

A summary of RSA grants activity for the year ended December 31, 2018 is as follows:



	Non-vested RSAs Outstanding
	Number of shares	Weighted average grant date fair value
Non-vested RSAs at December 31, 2017	—
Granted	445,000	$	4.27
Non-vested RSAs at December 31, 2018	445,000