Stock-Based Compensation and Warrants

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation and Warrants

8. Stock-Based Compensation and Warrants

The Plan - In 2007, the Company adopted the First Amended 2007 Stock Incentive Plan, as amended (the “Plan”). The Plan provides for the grant of Incentive Stock Options, Nonqualified Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards and other stock-based awards, or any combination of the foregoing to the Company’s key employees, non-employee directors and consultants. Under the Plan, the exercise price is determined by the Board of Directors or the compensation committee of the Board of Directors, and for options intended to qualify as qualified incentive stock options, may not be less than the fair market value as determined by the closing stock price at the date of the grant. Each option and award shall vest and expire as determined by the Board of Directors or the compensation committee. Options expire no later than ten years from the date of grant. All grants provide for accelerated vesting if there is a change of control, as defined in the Plan.

Stock-based compensation expense was $0.2 million and $0.1 million for the three months ended June 30, 2016 and June 30, 2015, respectively. Of these amounts, stock-based compensation expense for personnel involved in the Company’s general and administrative activities for both the three months ended June 30, 2016 and June 30, 2015 was $0.1 million. Stock-based compensation expense for personnel involved in the Company’s research and development activities for the three months ended June 30, 2016 and June 30, 2015 was $0.1 million and $32,000, respectively.

 

Stock-based compensation expense was $0.3 million and $0.2 million for the six months ended June 30, 2016 and June 30, 2015, respectively. Of these amounts, stock-based compensation expense for personnel involved in the Company’s general and administrative activities for the six months ended June 30, 2016 and June 30, 2015 was $0.2 million and $0.1 million, respectively. Stock-based compensation expense for personnel involved in the Company’s research and development activities for both the six months ended June 30, 2016 and June 30, 2015 was $0.1 million.

 

The Company utilized the Black-Scholes valuation model for estimating the fair value of the stock options granted, with the following weighted-average assumptions for options granted in the six months ended June 30, 2016 and 2015:

	2016		2015
Risk-free interest rate		1.37%		1.65%
Expected volatility		109%		139%
Expected term in years		6.1		6.1
Dividend yield		-%		-%

 

The following summary represents option activity under the Company’s stock-based compensation plan for the six months ended June 30, 2016:

			Weighted-
			Average
			Exercise
	Options		Price
	(in thousands)
Outstanding at December 31, 2015		5,752	$	1.05
Granted		1,300		2.55
Outstanding at June 30, 2016		7,052		1.33
Exercisable at June 30, 2016		5,345	$	1.00

As of June 30, 2016, the aggregate intrinsic value of outstanding stock options was $5.7 million. The aggregate intrinsic value represents the total pretax intrinsic value (the difference between the Company’s closing stock price on June 30, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2016. This amount changes based on the fair market value of the Company’s stock.

Warrants -  There were no warrants for services granted during the three months ended June 30, 2016. The Company had 10,000 warrants for services outstanding as of June 30, 2016 with a weighted average exercise price of $0.90. The warrants issued in connection with the sale of units of common stock were for cash value received and as such were not grants of compensation-based warrants.