NVUS 2018 Annual Report

on the date of exercise. There was no aggregate intrinsic value of options exercised during the years ended December 31, 2018 and 2017. As of December 31, 2018, total unrecognized stock-based compensation expense related to non-vested equity awards was $1.5 million, which is expected to be recognized over an estimated weighted-average period of 1.8 years. Stock-based Compensation Expense 7RWDO FRPSHQVDWLRQ H[SHQVH UHODWHG WR DOO RI WKH &RPSDQ\¶V V tock-based awards for the years ended December 31, 2018 and December 31, 2017 was comprised of the following (in thousands):

Year Ended December 31,

2018

2017

Stock-based compensation classified as: Research and development expense General and administrative expense Total stock-based compensation expense

$

249 $

69

1,294

510 579

$

1,543 $

Stock-based compensation expense for the year ended December 31, 2018 includes $524,000 of stock-based compensation expense related to a performance-based option grant which vested during 2018.

Valuation Assumptions The following table presents the assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options granted in the periods presented, as follows:

Year Ended December 31,

2018

2017

Expected stock price volatility

63% - 86% 79% - 86%

Risk-free interest rate

2% - 3%

1% - 3%

Expected life of option (in years)

5 - 7

5 - 7

Estimated dividend yield

0%

0%

Prior to the Reverse Merger, the fair value of the shares of common stock underlying the stock options had been the UHVSRQVLELOLW\ RI DQG GHWHUPLQHG E\ WKH &RPSDQ\¶V %RDUG RI Directors. Because there had been no public market for the &RPSDQ\¶V FRPPRQ VWRFN WKH %RDUG RI 'LUHFWRUV GHWHUPLQHG IDLU YDOXH RI FRPPRQ VWRFN DW WKH WLPH RI JUDQW RI WKH RSWLRQ by considering a number of objective and subjective factors including indepen GHQW WKLUG SDUW\ YDOXDWLRQV RI WKH &RPSDQ\¶V common stock, sales prices of convertible preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook, among other factors.

Note 8. Income Taxes Income (loss) before income taxes are as follows (in thousands):

Year Ended December 31,

2018

2017

Losses before income taxes: U.S.

$ (14,177) $ (12,470)

Non-U.S.

112

(646)

Total

$ (14,065) $ (13,116)

The provision (benefit) for income taxes are as follows (in thousands):

F-22