The Company’s Amended 2013 Plan provides for the granting of stock options, restricted stock awards, restricted stock units, stock bonus awards and performance-based awards. As of December 31, 2017, the Company had 9,176,723 of authorized unissued shares reserved and available for issuance upon exercise and conversion of outstanding awards under the Amended 2013 Plan.

The stock options are exercisable at no less than the fair market value of the underlying shares on the date of grant, and restricted stock and restricted stock units are issued at a value not less than the fair market value of the common stock on the date of the grant. Generally, stock options awarded are vested in equal increments ranging from two to four years on the annual anniversary date on which such equity grants were awarded. The stock options generally have a maximum term of 10 years.

The Company recognized expense of $3,419,799 and $2,732,908 relating to stock options and warrants issued to employees, officers, directors, consultants and former directors for the years ended December 31, 2017 and 2016, respectively. The Company also recognized expenses of $0 and $541,126 relating to common stock issued to employees, officers, directors, consultants and former directors during the years ended December 31, 2017 and December 31, 2016, respectively. For the years ended December 31, 2017 and 2016, stock-based compensation of $3,419,799 and $3,274,034 and was expensed to Selling, General and Administrative. As of December 31, 2017, total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted to employees, officers, and directors was $1,178,635 which is expected to be recognized over a weighted-average period of 1.52 years.

The following table summarizes stock option activity for the Amended 2013 Plan during the years ended December 31, 2017 and 2016:

The following table summarizes unvested stock options for the Amended 2013 Plan as of December 31, 2017 and 2016:

The following table presents the weighted-average assumptions used by the Company for calculating the fair value of its employee, non-employee, officer and director stock options for the Amended 2013 Plan using the Black-Scholes valuation model that have been granted during the years ended December 31, 2017 and 2016:

The risk-free interest rates are based on the implied yield available on U.S. Treasury constant maturities with remaining terms equivalent to the respective expected terms of the options. The Company estimates the expected term for stock options awarded to employees, non-employees, officers and directors using the simplified method in accordance with ASC Topic 718, Stock Compensation, because the Company does not have sufficient relevant historical information to develop reasonable expectations about future exercise patterns. The Company estimates the expected term for stock options awarded to employees, non-employees, officers and directors using the contractual term. Expected volatility is calculated based on the Company’s peer group, consisting of five companies in the industry in which the Company does business because the Company does not have sufficient historical volatility data. The Company will continue to use peer group volatility information until historical volatility of the Company is available to measure expected volatility for future grants. In the future, as the Company gains historical data for volatility of its own stock and the actual term over which stock options are held, expected volatility and the expected term may change, which could substantially change the grant-date fair value of future stock option awards, and, consequently, compensation of future grants.

The Company has established performance milestones in connection with the Company’s drug development efforts for its lead drug candidate CVSI-007. In fiscal year 2016 the Company achieved the milestone of completing the development of an FDA current good manufacturing practice grade batch of successfully synthetically formulated “ready to ship” CBD for use in drug development activities, and an aggregate of 2,750,000 options vested for three members of senior management outside of the Amended 2013 Plan. During fiscal year 2017, the Company achieved the milestone of receiving the minutes from the Pre- Investigational New Drug Application meeting held with the FDA in June 2017 which resulted in an aggregate of 4,500,000 options vested for three members of senior management outside of the Amended 2013 Plan. The following table summarizes stock option activity outside of the Amended 2013 Plan during the year ended December 31, 2017:

The following table summarizes unvested stock options outside of the Amended 2013 Plan as of December 31, 2017:

As of December 31, 2017, there were 10,750,000 remaining unvested stock options granted outside of the Amended 2013 Plan which vest upon the completion of future performance conditions.

The following table presents the weighted-average assumptions used by the Company for calculating the fair value of its employee stock options granted outside of the Amended 2013 Plan using the Black-Scholes valuation model during the year ended December 31, 2017: