EXICURE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except unit, share, per unit, and per share data)
grant date and vests 1/48th monthly thereafter until fully vested at the end of 48 months. Subsequent stock option grants vest 1/48th monthly until fully vested at the end of 48 months. The term of common stock option grants is ten years unless terminated earlier as described above.
Equitybased compensation expense is classified in the statements of operations as follows:

       
 Year Ended December 31, 
 2017   2016 
Research and development expense  $  172 
  $  160 

General and administrative expense  1,290 
  522 

 $  1,462 
  $  682 

Unamortized equitybased compensation expense at December 31, 2017 was $2,023, which is expected to be amortized over a weightedaverage period of 2.4 years.
The Company utilizes the BlackScholes optionpricing model to determine the fair value of common stock option grants. The BlackScholes optionpricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model also requires the input of highly subjective assumptions. In addition to an assumption on the expected term of the option grants as discussed below, application of the BlackScholes model requires additional inputs for which we have assumed the values described in the table below:

     
 Year Ended December 31, 
 2017   2016 
Expected term  5.3 to 6.5 years 
  5.0 to 7.0 years 

Riskfree interest rate  1.97% to 2.17%; weighted avg. 2.07% 
  1.01% to 2.24%; weighted avg. 1.58% 

Expected volatility  80.8% to 83.1%; weighted avg. 81.0% 
  79.2% to 83.6%; weighted avg. 79.9% 

Forfeiture rate  5  %   5  % 
Expected dividend yield  —  %   —  % 
The expected term is based upon the “simplified method” as described in Staff Accounting Bulletin Topic 14.D.2. Currently, the Company does not have sufficient experience to provide a reasonable estimate of an expected term of its common stock options. The Company will continue to use the “simplified method” until there is sufficient experience to provide a more reasonable estimate in conformance with ASC 718103025 through 3026. The riskfree interest rate assumptions were based on the U.S. Treasury bond rate appropriate for the expected term in effect at the time of grant. The expected volatility is based on calculated enterprise value volatilities for publicly traded companies in the same industry and general stage of development. The estimated forfeiture rates were based on historical experience for similar classes of employees. The dividend yield was based on expected dividends at the time of grant.