Share-based compensation expense was included in general and administrative and research and development costs as follows in the accompanying statements of comprehensive loss for the periods indicated below (in thousands):

 

Ocuphire Stock Options

 

2020 Equity Incentive Plan

 

The stockholders of the Company approved the 2020 Equity Incentive Plan (the “2020 Plan”) for stock-based awards. The 2020 Plan became effective on November 5, 2020.  Under the 2020 Plan, (i) 1,000,000 new shares of common stock are reserved for issuance and (ii) up to 70,325 additional shares of common stock may be issued, consisting of (A) shares that remain available for the issuance of awards under prior equity plans and (B) shares of common stock subject to outstanding stock options or other awards covered by prior equity plans that have been cancelled or expire on or after the date that the 2020 Plan became effective.

 

2018 Equity Incentive Plan

 

Prior to the 2020 Plan, the Company adopted a 2018 Equity Incentive Plan (the “2018 Plan”) in April 2018 under which 1,175,000 shares of the Company’s common stock were reserved for issuance to employees, directors and consultants upon the amendment of the 2018 Plan in December 2019. The reserve of common stock for the 2018 Plan has been adjusted to give effect to the Exchange Ratio.

Both the 2020 Plan and the 2018 Plan permit the grant of incentive and non‑statutory stock options, appreciation rights, restricted stock, restricted stock units, performance stock and cash awards, and other share‑based awards.

During the years ended December 31, 2020 and 2019, 830,167 and 579,486 stock options were granted to newly-hired officers, directors, employees and consultants (as adjusted for the Exchange Ratio), respectively, generally vesting over an immediate to forty-eight (48) month period. The Company recognized $1.4 million and $0.3 million in share-based compensation expense related to stock options during the years ended December 31, 2020 and 2019, respectively. The following table summarizes the Company’s stock option plan activity:

 

The weighted average fair value per share of options granted during the years ended December 31, 2020 and 2019 was $3.92 and $0.87, respectively. The Company measures the fair value of stock options with service‑based and performance‑based vesting criteria to employees, directors, consultants and directors on the date of grant using the Black‑Scholes option pricing model. The Company does not have history to support a calculation of volatility and expected term. As such, the Company has used a weighted‑average volatility considering the volatilities of several guideline companies.

 

For purposes of identifying similar entities, the Company considered characteristics such as industry, length of trading history, and stage of life cycle. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The average expected life of the options was based on the contractual term for agreements that allow for exercise of vested options through the end of the contractual term upon termination of continuous service, and for all other agreements, was based on the mid‑point between the vesting date and the end of the contractual term according to the “simplified method” as described in Staff Accounting Bulletin 110. The risk‑free interest rate is determined by reference to implied yields available from U.S. Treasury securities with a remaining term equal to the expected life assumed at the date of grant. The Company records forfeitures when they occur.

The weighted‑average assumptions used in the Black‑Scholes option‑pricing model are as follows during the years ended December 31, 2020 and 2019:

 

During the years ended December 31, 2020 and 2019, 379,576 and 423,747 stock options vested (as adjusted for the Exchange Ratio), respectively. The weighted average fair value per share of options vesting during the years ended December 31, 2020 and 2019 was $2.77 and $0.66, respectively. During the years ended December 31, 2020 and 2019, 43,002 and no stock options were forfeited.  As of December 31, 2020, 446,843 shares were available for future issuance under the 2020 Plan and 2018 Plan.

 

Unrecognized share‑based compensation cost was $2.5 million as of December 31, 2020. The unrecognized share‑based expense is expected to be recognized over a weighted average period of 1.5 years.

 

Ocuphire Restricted Stock Awards

 

On November 11, 2020, the Company granted 40,000 restricted stock awards (“RSAs”) that vest on January 8, 2021. There were no RSAs granted during the years ended December 31, 2019.

 

The RSAs granted in previous years were subject to various vesting schedules.  During the year ended December 31, 2020 and 2019, zero and 64,552 RSAs vested, respectively, and no RSAs were forfeited during the periods presented.

 

The share-based compensation expense attributed to the RSAs during the years ended December 31, 2020 and 2019 was $0.1 million and $24,000, respectively.

 

A summary of RSA activity is as follows for the years ended December 31, 2020 and 2019:

 

Former Rexahn Options

 

Following the closing of the Merger, 123 outstanding, unexercised and vested options to purchase Common Stock granted under the Rexahn Pharmaceuticals Stock Option Plan, as amended (the “Rexahn 2003 Plan”, and together with the Rexahn 2013 Plan, the “Prior Plans”), remained outstanding as of December 31, 2020.  The exercise prices related to the outstanding options granted under the Prior Plans ranged from $182.40 to $600.00 per share with an average remaining contractual life of 1.1 years.