Total share-based compensation related to stock options, common stock awards, and non-financing warrants was $0.3 million and $0.6 million during the three months ended September 30, 2017 and 2016, respectively, and $1.5 million and $2.6 million for the nine months ended September 30, 2017 and 2016, respectively.

Share-based compensation expense is classified in the unaudited condensed consolidated statements of operations as follows:

Employee Stock Options

During the nine months ended September 30, 2017, the Company granted 350,000 employee stock options. The key valuation assumptions used consisted of the Company’s stock price, a risk-free rate of 0.19% and an expected volatility of approximately 110%. During the nine months ended September 30, 2016, the Company granted 12,122 employee stock options. The key valuation assumptions used consisted of the Company’s stock price, a risk-free rate of 0.54% and an expected volatility of 123%. During the nine months ended September 30, 2017 and 2016, the Company extended the exercise expiration date of certain former employee stock option awards resulting in a change in incremental value of approximately $4,000 and $24,000, respectively, which was charged to administrative expense. In August 2016, the Company modified the exercise price and vesting of certain employee stock option awards resulting in a change in incremental value and catch up of share-based amortization of approximately $0.1 million which was charged to administrative and research and development expense. The Company recognized a total of $0.3 million and $0.5 million of compensation expense related to employee stock options during the three months ended September 30, 2017 and 2016, respectively, and $1.4 million and $1.3 million during the nine months ended September 30, 2017 and 2016, respectively.

Non-Employee Stock Options

No non-employee stock options were granted and no non-employee stock options were exercised during the nine months ended September 30, 2017 or 2016. In August 2016, the Company modified the exercise price and vesting of certain non-employee stock option awards resulting in a change in incremental value and catch up of share-based amortization of approximately $17,000 which was charged to administrative expense. The Company recognized approximately $8,000 and $80,000 of compensation expense related to non-employee stock options during the three and nine months ended September 30, 2017, respectively, and approximately $60,000 for both the three and nine months ended September 30, 2016, respectively.

Common Stock Awards

During the three months ended September 30, 2017 and 2016, the Company agreed to grant 14,091 and 8,146 common stock awards, respectively, and 26,801 and 20,309 common stock awards during the nine months ended September 30, 2017 and 2016, respectively, based on the value of the services provided and the average stock price during each respective quarter. As all services were rendered in each respective quarter, approximately $38,000 and $37,000 of compensation expense related to common stock awards was recognized during the three month periods ended September 30, 2017 and 2016, respectively, and approximately $0.1 million during both the nine months ended September 30, 2017 and 2016, respectively. The common stock awards were not issued as of September 30, 2017.

Warrants

In connection with certain of the Company’s collaboration agreements and consulting arrangements, the Company has issued warrants to purchase shares of common stock as payment for services. As of September 30, 2017 and December 31, 2016, warrants to purchase 646,249 shares of common stock were outstanding. The fair value of these warrants was determined at each issuance date using the Black-Scholes option pricing model. The warrants are subject to re-measurement at each reporting period until the measurement date is reached. Expense is recognized on a straight-line basis over the expected service period or at the date of issuance, if there is not a service period. The Company recognized a gain of approximately $22,000 and $2,000 related to collaboration and consulting warrants during the three months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, the Company recognized a gain of $0.1 million and expense of $1.1 million, respectively, related to collaboration and consulting warrants.

No warrants have been issued in the first nine months of 2017. During the first nine months of 2016, warrants to purchase 212,222 shares of common stock were issued.