Panbela Therapeutics, Inc. - Quarter Report: 2019 March (Form 10-Q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

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FORM 10-Q

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(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2019

 

or

 

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File No.: 000-55242

 

Sun BioPharma, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware		87-0543922
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
712 Vista Blvd #305, Waconia, Minnesota
(Address of principal executive offices)

 

(952) 479-1196

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑   No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑   No ☐ *

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☑
	Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☑

 

Securities registered pursuant to Section 12(b) of the Act: None

 

On May 10, 2019, there were 5,070,341 shares of the registrant’s common stock, par value $0.001, outstanding.

 

 

 

Sun BioPharma, Inc.
Index to Quarterly Report on Form 10-Q

 

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	18
Item 4.	Controls and Procedures	18
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Mine Safety Disclosures	19
Item 5.	Other Information	19
Item 6.	Exhibits	19

 

 

 

		March 31, 2019				December 31, 2018
		(Unaudited)
ASSETS
Current assets:
Cash		$	1,379			$	1,405
Prepaid expenses and other current assets			73				110
Income tax receivable			408				332
Total current assets			1,860				1,847
Other noncurrent assets			51				51
Total assets		$	1,911			$	1,898
LIABILITITES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	905			$	1,064
Accrued expenses			200				212
Convertible notes payable, net of debt discounts			1,083				64
Term debt, current portion			259				286
Accrued interest			52				4
Total current liabilities			2,499				1,630
Stockholders' (deficit) equity:
Preferred stock, $0.001 par value; 10,000,000 authorized; no shares issued or outstanding as of March 31, 2019 and December 31 2018			-				-
Common stock, $0.001 par value; 100,000,000 authorized; 5,070,341 and 5,077,483 shares issued and outstanding, as of March 31, 2019 and December 31, 2018, respectively			5				5
Additional paid-in capital			35,795				35,038
Accumulated deficit			(36,639	)			(35,058	)
Accumulated comprehensive income			251				283
Total stockholders' (deficit) equity			(588	)			268
Total liabilities and stockholders' (deficit) equity		$	1,911			$	1,898

 

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		Three Months Ended March 31,
		2019				2018
Operating expenses:
General and administrative		$	303			$	658
Research and development			350				580
Operating loss			(653	)			(1,238	)
Other (expense) income:
Grant income			-				10
Interest expense			(1,033	)			(473	)
Other(expense) income			34				(80	)
Total other expense			(999	)			(543	)
Loss before income tax benefit			(1,652	)			(1,781	)
Income tax benefit			71				28
Net loss			(1,581	)			(1,753	)
Foreign currency translation adjustment			(32	)			69
Comprehensive loss		$	(1,613	)		$	(1,684	)
Basic and diluted net loss per share		$	(0.31	)		$	(0.45	)
Weighted average shares outstanding - basic and diluted			5,072,397				3,927,296

 

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		For the Three Months Ended March 31, 2018
		Common Stock								Additional Paid-In				Accumulated				Accumulated Other Comprehensive				Total Stockholders'
		Shares				Amount				Capital				Deficit				Gain (Loss)				Equity (Deficit)
Balances as of January 1, 2018			3,842			$	4			$	25,625			$	(29,153	)		$	(165	)		$	(3,689	)
Sale of common stock and warrants			252				-				1,261				-				-				1,261
Stock-based compensation			-				-				1,792				-				-				1,792
Net loss			-				-				-				(1,753	)			-				(1,753	)
Foreign currency translation adjustment			-				-				-				-				69				69
Balances as of March 31, 2018			4,094			$	4			$	28,678			$	(30,906	)		$	(96	)		$	(2,320	)

		For the Three Months Ended March 31, 2019
		Common Stock								Additional Paid-In				Accumulated				Accumulated Other Comprehensive				Total Stockholders'
		Shares				Amount				Capital				Deficit				Gain (Loss)				Equity (Deficit)
Balances as of January 1, 2019			5,077			$	5			$	35,038			$	(35,058	)		$	283			$	268
Beneficial conversion feature on convertible notes payable			-				-				353				-				-				353
Warrants issued with sale of convertible notes payable			-				-				419				-				-				419
Common stock converted into convertible notes payable			(7	)			-				(25	)			-				-				(25	)
Stock-based compensation			-				-				10				-				-				10
Net loss			-				-				-				(1,581	)			-				(1,581	)
Foreign currency translation adjustment			-				-				-				-				(32	)			(32	)
Balances at March 31, 2019			5,070			$	5			$	35,795			$	(36,639	)		$	251			$	(588	)

 

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		Three Months Ended March 31,
		2019				2018
Cash flows from operating activities:
Net loss		$	(1,581	)		$	(1,753	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation			10				698
Amortization of debt discount			974				427
Amortization of debt issuance costs			6				2
Non-cash interest expense			48				43
Changes in operating assets and liabilities:
Income tax receivable			(74	)			(36	)
Prepaid expenses and other current assets			38				(15	)
Accounts payable			(193	)			111
Accrued liabilities			(11	)			(65	)
Net cash used in operating activities			(783	)			(588	)
Cash flows from financing activities:
Proceeds from the sale of convertible promissory notes, net of debt issuance costs of $7			810				-
Proceeds from sale of common stock and warrants, net of offering costs of $152			-				1,261
Deposits received for possible future stock sales			-				350
Repayment of demand note			(25	)			-
Repayments of term debt			(27	)			-
Net cash provided by financing activities			758				1,611
Effect of exchange rate changes on cash			(1	)			(6	)
Net change in cash			(26	)			1,017
Cash at beginning of period			1,405				152
Cash at end of period		$	1,379			$	1,169
Supplemental disclosure of cash flow information:
Cash paid during period for interest		$	5			$	21
Supplemental disclosure of non-cash transactions:
Beneficial conversion feature on convertible notes		$	353			$	-
Warrants issued with convertible notes		$	419			$	-
Common stock converted into convertible notes payable		$	25
Options granted in exchange for release from contingent payment obligations		$	-			$	1,094

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1.

Business

 

Sun BioPharma, Inc. and its wholly-owned subsidiary Sun BioPharma Australia Pty Ltd. (collectively “we,” “us,” “our,” and the “Company”) exists for the primary purpose of advancing the commercial development of a proprietary polyamine analogue for the treatment of patients with pancreatic cancer and for a second indication for the treatment of patients with chronic and recurrent acute pancreatitis. We have exclusively licensed the worldwide rights to this compound, which has been designated as SBP-101, from the University of Florida Research Foundation, Inc. (“UFRF”).

 

2.	Risks and Uncertainties

 

The Company operates in a highly regulated and competitive environment. The development, manufacturing and marketing of pharmaceutical products require approval from, and are subject to ongoing oversight by, the Food and Drug Administration (“FDA”) in the United States, the Therapeutic Goods Administration in Australia, the European Medicines Agency in the European Union, and comparable agencies in other countries. Obtaining approval for a new pharmaceutical product is never certain, may take many years, and is normally expected to involve substantial expenditures.

 

We have incurred losses of $36.6 million since our inception in 2011. For the three months ended March 31, 2019, we incurred a net loss of $1.6 million, which includes the amortization of discount on debt of $1.0 million. We also incurred negative cash flows from operating activities of $0.8 million for this period. During this same period, we raised $0.8 million from the sale of convertible promissory notes and warrants to purchase common stock, as discussed in Note 4 titled “Liquidity and Business Plan”. As we continue to pursue development activities and seek commercialization of our initial product candidate, SBP-101, we expect to incur substantial losses, which are likely to generate negative net cash flows from operating activities,. As of March 31, 2019, we had cash of $1.4 million, working capital deficit of $1.7 million (current assets less current liabilities excluding unamortized debt discount of $1.1 million), and stockholders’ deficit of $0.6 million. The Company’s principal sources of cash have historically included the issuance of convertible debt and equity securities.

 

The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts of liabilities that might result from the outcome of these uncertainties. Our current independent registered public accounting firm included a paragraph emphasizing this going concern uncertainty in their audit report regarding our 2018 financial statements dated March 22, 2019. Our ability to continue as a going concern, realize the carrying value of our assets and discharge our liabilities in the ordinary course of business is dependent upon a number of factors, including our ability to obtain additional financing, the success of our development efforts, our ability to obtain marketing approval for our SBP-101 product candidate in the United States, Australia, the European Union or other markets and ultimately our ability to market and sell our SBP-101 product candidate. These factors, among others, raise substantial doubt about our ability to continue operations as a going concern. See Note 4 titled “Liquidity and Business Plan.”

 

3.	Basis of Presentation

 

We have prepared the accompanying interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which, in the opinion of management, are necessary to present fairly our consolidated financial position, consolidated results of operations and consolidated cash flows for the periods and as of the dates presented. Our fiscal year ends on December 31. The condensed consolidated balance sheet as of December 31, 2018 was derived from audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. These interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes thereto included in our most recent filed Annual Report on Form 10-K and our subsequent filings with the SEC. The nature of our business is such that the results of any interim period may not be indicative of the results to be expected for the entire year.

 

 

Recently Adopted Accounting Pronouncements

 

In June 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2018-07, “Compensation – Stock Compensation (Topic 718).” ASU 2018-07 simplifies the accounting for nonemployee stock-based payment transactions. This ASU was adopted by the Company effective for the fiscal year beginning January 1, 2019. Historically, the ultimate stock-based compensation related to non-employee common stock options would fluctuate based on changes in the underlying option pricing model as the awards vest.  Under the new guidance, the total compensation cost of non-employee options is determined at grant date. The Company has evaluated the impact of this new guidance on its financial statements and has determined that it would affect how the Company will record stock-based compensation related to common stock options and other equity-based compensation, if any, granted to non-employees.

 

In February 2016, the FASB issued ASU 2016-02, “Leases,” which created a new Topic, Accounting Standards Codification (“ASC”) Topic 842 and established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments, that arise from leases.  For leases with a term of 12 months or less, a lessee is permitted to make an election under which such assets and liabilities would not be recognized, and lease expense would be recognized generally on a straight-line basis over the lease term.  This standard was adopted by the Company for the year beginning January 1, 2019. The Company has evaluated the impact of this revised guidance on its financial statements and determined it had no material impact, as the Company has no leasing arrangements with terms greater than one year.

 

4.	Liquidity and Business Plan

 

We will need to obtain additional funds to continue our operations and execute our current business plans. We may seek to raise additional funds through various sources, such as equity and debt financings, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure additional sources of funds to support our operations, or if such funds are available to us, that such additional financing will be sufficient to meet our needs or on terms acceptable to us. This risk would increase if our clinical data is inconclusive or not positive or economic conditions worsen in the market as a whole or in the pharmaceutical or biotechnology markets individually.

 

To further preserve funds, effective November 1, 2018 the Company’s Board of Directors and management team implemented temporary salary reductions for all employees. After the resignation of the Company’s President and CEO, the Company consolidated this position with that of our Executive Chairman as of the same date. Salaries were restored to contracted levels as of February 1, 2019.  These reductions in salaries and the number of employees resulted in estimated cost savings of $80,000 during the quarter ended March 31, 2019.

 

As previously reported, in closings occurring on December 21 and 31, 2018, the Company sold $1,334,000 principal amount of unsecured convertible promissory notes (the “Notes”) and warrants (the “Warrants”) to purchase up to 762,076 shares of common stock in a private placement to certain investors pursuant to a Securities Purchase Agreement. In closings occurring on January 14, 25 and 31, 2019, the Company sold $842,000 aggregate principal amount of additional Notes and Warrants to purchase up to an aggregate of 481,422 additional shares of common stock, resulting in additional gross proceeds of $817,000 million. In January, a previous issuance of 7,142 shares was cancelled and the value of $25,000 was converted into the Notes. See Note 6 titled “Indebtedness” for a detailed discussion of the material terms of the Notes.  The Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $4.50. The Warrants issued in January 2019 had a fair market value of approximately $838,000 upon issuance.

 

If we are unable to obtain additional financing when needed, we believe that will need to reduce our operations by taking actions that may include, among other things, reducing use of outside professional service providers, reducing staff or further reducing staff compensation, significantly modifying or delaying the development of our SBP-101 product candidate, licensing rights to third parties, including the right to commercialize our SBP-101 product candidate for pancreatic cancer, recurrent acute and/or chronic pancreatitis or other applications that we would otherwise seek to pursue, or discontinuing operations entirely.

 

Our future success is dependent upon our ability to obtain additional financing, the success of our development efforts, our ability to obtain marketing approval for our SBP-101 product candidate in the United States or other markets and ultimately our ability to market and sell our SBP-101 product candidate. If we are unable to obtain additional financing when needed, if our clinical trials are not successful or if we are unable to obtain marketing approval, we would not be able to continue as a going concern and would be forced to cease operations and liquidate our company.

 

There can be no assurances that we will be able to obtain additional financing on commercially reasonable terms, or at all. The sale of additional convertible debt or equity securities would likely result in dilution to our current stockholders.

 

 

 

5.	Summary of Significant Accounting Policies

 

Principles of consolidation

 

The accompanying condensed consolidated financial statements include the assets, liabilities and expenses of the Company. All significant intercompany transactions and balances have been eliminated in consolidation.

 

Use of estimates

 

The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of expenses during the reporting period. Actual results could differ from those estimates.

 

Beneficial conversion feature

 

For convertible debt where the rate of conversion is below fair market value for our common stock, the Company records a "beneficial conversion feature" and related debt discount that is presented as a direct deduction from the carrying amount of the related debt and as an increase to additional paid-in capital. The debt discount is amortized through interest expense over the life of the related debt.

 

Debt issuance costs

 

Costs associated with the issuance of debt instruments are capitalized and presented as a direct deduction from the carrying amount of the related debt liability. These costs are amortized through interest expense over the life of the related debt.

 

Research and development costs

 

Research and development costs include expenses incurred in the conduct of our second Phase 1 human clinical trial, for third-party service providers performing various testing and accumulating data related to our preclinical studies; sponsored research agreements; developing and scaling the manufacturing process necessary to produce sufficient amounts of the SBP-101 compound for use in our pre-clinical studies and human clinical trials; consulting resources with specialized expertise related to execution of our development plan for our SBP-101 product candidate; personnel costs, including salaries, benefits and share-based compensation; and costs to license and maintain our licensed intellectual property.

 

We charge research and development costs, including clinical trial costs, to expense when incurred. Our human clinical trials are, and will be, performed at clinical trial sites and are administered jointly by us with assistance from contract research organizations (“CROs”). Costs of setting up clinical trial sites are accrued upon execution of the study agreement. Expenses related to the performance of clinical trials generally are accrued based on contracted amounts and the achievement of agreed upon milestones, such as patient enrollment, patient follow-up, etc. We monitor levels of performance under each significant contract, including the extent of patient enrollment and other activities through communications with the clinical trial sites and CROs, and adjust the estimates, if required, on a quarterly basis so that clinical expenses reflect the actual effort expended at each clinical trial site and by each CRO.

 

All material CRO contracts are terminable by us upon written notice and we are generally only liable for actual effort expended by the CROs and certain non-cancelable expenses incurred at any point of termination.

 

We expense costs associated with obtaining licenses for patented technologies when it is determined there is no alternative future use of the intellectual property subject to the license.

 

Stock-based compensation

 

In accounting for stock-based incentive awards, we measure and recognize the cost of employee and non-employee services received in exchange for awards of equity instruments based on the fair value of those awards on the grant date. Calculating stock-based compensation expense requires the input of highly subjective assumptions, which represent our best estimates and involve inherent uncertainties and the application of management’s judgment. Compensation cost is recognized ratably using the straight-line attribution method over the vesting period, which is considered to be the requisite service period. Compensation expense for performance-based stock option awards is recognized when “performance” has occurred or is probable of occurring.

 

 

The fair value of stock-based awards is estimated at the date of grant using the Black-Scholes option pricing model. The determination of the fair value of stock-based awards is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables. Risk free interest rates are based upon U.S. Treasury rates appropriate for the expected term of each award. Expected volatility rates are based primarily on the volatility rates of a set of guideline companies, which consist of public and recently public biotechnology companies. The assumed dividend yield is zero, as we do not expect to declare any dividends in the foreseeable future. The expected term of options granted is determined using the “simplified” method. Under this approach, the expected term is presumed to be the mid-point between the average vesting date and the end of the contractual term.

 

Foreign currency translation adjustments

 

The functional currency of Sun BioPharma Australia Pty Ltd is the Australian Dollar. Accordingly, assets and liabilities, and equity transactions of Sun BioPharma Australia Pty Ltd are translated into U.S. dollars at period-end exchange rates. Revenues and expenses are translated at the average exchange rate in effect for the period. The resulting translation gains and losses are recorded as a component of accumulated comprehensive loss presented within the stockholders’ equity (deficit). During the three-month periods ended March 31, 2019 and 2018, any reclassification adjustments from accumulated other comprehensive loss to operations were inconsequential.

 

Comprehensive loss

 

Comprehensive loss consists of our net loss and the effects of foreign currency translation.

 

Net loss per share

 

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is based on the weighted average of common shares outstanding during the period plus dilutive potential common shares calculated using the treasury stock method. Such potentially dilutive shares are excluded when the effect would be anti-dilutive or reduce a net loss per share. The Company’s potential dilutive shares, which include convertible debt, outstanding common stock options, and warrants, have not been included in the computation of diluted net loss per share for all periods as the result would be anti-dilutive.

 

The following table sets forth the potential shares of common stock that were not included in the calculation of diluted net loss per share as their effects would have been anti-dilutive as of:

 

 

 

 

6.	Indebtedness

 

Notes

 

In January 2019 we sold convertible promissory notes (the “Notes”) and Warrants to purchase common stock for gross proceeds $0.8 million.  As of March 31, 2019, we had $2.2 million aggregate principal amount of Notes outstanding. The  Notes  have a mandatory conversion of all principal and accrued interest into common stock on the earlier of (1) June 30, 2019 or (2) the date the Company receives gross proceeds of at least $6.0 million from the sale of equity securities (subject to certain exclusions) and bear interest at a rate of 10.0% per year. In addition to the Notes sold; investors received a warrant to purchase two shares of common stock for every $3.50 principal amount of Notes purchased. In total, warrants to purchase up to 481,422 shares of common stock were issued with the Notes sold in January. In January, common stock totaling 7,142 shares were cancelled and the value of $25,000 was converted into the Notes, no gain or loss occurred on this conversion. The warrants issued in January 2019 had a fair market value of $0.8 million upon issuance. After assigning the relative value of the warrants to the proceeds of the notes it was determined that the Notes sold in January 2019 contained a beneficial conversion feature with an intrinsic value of approximately $0.3 million. Both the relative value of the warrants and the beneficial conversion feature were recorded as a debt discount which is presented as a direct deduction from the carrying value of the Notes. The discount is being amortized through interest expense over the life of the 2018 Notes.

 

Term debt

 

Effective April 5, 2019 the terms of our unsecured loan (the “Term Debt”)  payable to the Institute for Commercialization of Public Research, Inc. (the “Institute”) were amended to extend the maturity date from May 1, 2019 to December 31, 2019.  The Institute agreed to the amendment in exchange for a warrant to purchase 5,555 shares of common stock at an exercise price of $4.50. The warrant expires five years from issuance. The fair market value of the warrant is nominal and as such has not been given any accounting treatment. The amendment requires the continuation of monthly payments of principal and interest totaling $10,000. The unpaid principal balance at March 31, 2019 was $259,000.

 

Deferred financing costs

 

The following table summarizes the deferred financing costs which are presented as a direct reduction of the carrying amount of their related debt liabilities (in thousands):

 

 

 

7.	Stockholders’ Deficit

 

Shares of common stock reserved for future issuance were as follows as of March 31, 2019:

 

 

 

 

8.	Stock-based Compensation

 

2016 Omnibus Incentive Plan

 

The Sun BioPharma, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”) was adopted by our Board of Directors in March 2016 and approved by our stockholders in May 2016. The 2016 Plan permits the granting of incentive and non-statutory stock options, restricted stock, stock appreciation rights, performance units, performance shares and other stock awards to eligible employees, directors and consultants. We grant options to purchase shares of common stock under the 2016 Plan at no less than the fair market value of the underlying common stock as of the date of grant. Options granted under the 2016 Plan have a maximum term of ten years. Under the 2016 Plan, a total of 1,500,000 shares of common stock were initially reserved for issuance. As of March 31, 2019, options to purchase 767,851 shares of common stock were outstanding under the 2016 Plan and 732,149 shares remained available for future awards.

 

2011 Stock Option Plan

 

Our Board of Directors ceased making awards under the Sun BioPharma, Inc. 2011 Stock Option Plan (the “2011 Plan”) upon the receipt of stockholder approval for the 2016 Plan. Awards outstanding under the 2011 Plan remain outstanding in accordance with and pursuant to the terms thereof. Options granted under the 2011 Plan have a maximum term of ten years and generally vest over zero to two years for employees. As of March 31, 2019, options to purchase 264,360 shares of common stock remained outstanding under the 2011 Plan.

 

Stock-based Compensation Expense

 

General and administrative (“G&A”) and research and development (“R&D”) expenses include non-cash stock-based compensation expense as a result of our issuance of stock options. The terms and vesting schedules for stock-based awards vary by type of grant and the employment status of the grantee. The awards granted through March 31, 2019 vest based upon time-based and performance conditions. No awards were granted for the three months ended March 31, 2019. There was approximately $53,000 unamortized stock-based compensation expense related to options granted to employees as of March 31, 2019.

 

Stock-based compensation expense for each of the periods presented is as follows (in thousands):

 

 

 

No options were granted, exercised, cancelled or forfeited during the three months ended March 31, 2019.

 

Information about stock options outstanding, vested and expected to vest as of March 31, 2019, is as follows:

 

 

 

 

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