Quarterly report pursuant to Section 13 or 15(d)

Stock Plans

Stock Plans

3 Months Ended

Mar. 31, 2019

Stock Plans

In January 2019, our stockholders approved an amendment to the Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan to increase the number of shares authorized for awards thereunder from 583,334 to 1,666,667.

In January 2019, our stockholders approved a repricing of 122,115 fully-vested stock options with exercise prices in excess of $21.00 held by employees and consultants other than the named executive officers or members of the Board. The effected options were repriced at $1.55. As a result of the repricing of these stock options, we incurred a total of approximately $81,000 of additional stock-based compensation expense during the three months ended March 31, 2019, of which approximately $54,000 was recorded within research and development and the remainder within selling, general and administrative

in our condensed statement of operations and comprehensive loss

The following table summarizes the stock-based compensation expense recorded for awards under our stock option plans (in thousands):

	Three Months Ended March 31,
(in thousands)	2019		2018
Research and development	$	77	$	163
Selling, general and administrative		59		269
Total stock-based compensation expense	$	136	$	432

We use the Black-Scholes-Merton option-pricing model with the following assumptions to estimate the fair value of our stock options:

	Three Months Ended March 31,
	2019			2018
Weighted-average risk-free interest rate		2.58	%		2.75	%
Expected dividend payments		—			—
Expected holding period (years) 1		6.3			6.4
Weighted-average volatility factor 2		0.91			0.89
Estimated forfeiture rates for options granted 3		25	%		26	%

(1)

Expected holding period is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and the expectations of future employee behavior.

(2)

Weighted average volatility is based on the historical volatility of our common stock.

(3)

Estimated forfeiture rates are based on historical data.

The following table summarizes option activity:

	Options (in thousands)			Weighted Average Exercise Price per share		Weighted Average Remaining Option Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2019		665		$	17.94		6.44	$	4
Granted		5			1.60
Forfeited		(8	)		31.17
Outstanding at March 31, 2019		662		$	11.92		6.24	$	67
Exercisable at March 31, 2019		576		$	13.48		5.75	$	31

As of March 31, 2019, there was approximately $62,000 of total unrecognized compensation expense related to non-vested stock options. This expense was expected to be recognized over a weighted-average period of approximately 3.5 years.