Equity

A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2018 is as follows:



	Number of shares	Weighted average exercise price
Options outstanding at December 31, 2017	6,342,526	$	6.51
Options granted	1,720,500	$	8.06
Less:
Options exercised	72,500	$	4.14
Options canceled or expired	12,500	$	7.52
Options outstanding at March 31, 2018	7,978,026	$	6.86
Exercisable at March 31, 2018	2,250,840	$	5.63

Of the 7,978,026 outstanding options at March 31, 2018, 1,180,000 were variable accounted stock options issued to non-employees of the Company of which 445,833 options were vested and 734,167 options were unvested as of March 31, 2018.

The fair value of each stock option award granted during the three months ended March 31, 2018 was estimated as of the grant date using a trinomial lattice model with the following weighted average assumptions:



	Three Months Ended March 31, 2018
Expected term (in years)	2.0 - 4.0
Risk-free interest rate (%)	2.4%
Expected volatility (%)	35.6% - 45.5%
Dividend yield (%)	—
Weighted average fair value/share at grant date	$2.78

As of March 31, 2018, there was approximately $7.9 million of unrecognized share based compensation expense related to stock options that will be recognized over a weighted-average period of approximately 1.3 years. This includes approximately $0.9 million in unrecognized expense related to the 734,167 shares of unvested variable accounted for stock options subject to fair value adjustment at the end of each reporting period based on changes in the Company’s stock price.

Stock based compensation expense recognized for stock options and restricted stock and included in the consolidated statements of operations was allocated as follows (in thousands):



	Three Months Ended March 31,
	2018		2017
Research and development expense	$	18	$	43
General and administrative expense	1,606		1,087
Total stock based compensation expense	$	1,624	$	1,130

Stock based compensation recorded in research and development relates to unvested options granted to a non-employee.

We offer an employee stock purchase plan (“ESPP”) through which eligible employees may purchase shares of our common stock at a discount. On May 25, 2017, the Company amended the ESPP, increasing the discount from 5% to 15% of the fair market value of the Company’s common stock. As a result of this change, we have recorded stock based compensation expense related to the ESPP for the quarter ended March 31, 2018.

During the three months ended March 31, 2018 and 2017, employees purchased 36,922 and 24,363 shares, respectively under the ESPP. The expense recorded for these periods was $0.1 million and $0, respectively.