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Stock-Based Compensation
6 Months Ended
Jun. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation

8. STOCK-BASED COMPENSATION

Stock option activity under the Company’s 2012 Equity Incentive Plan (the “2012 Plan”) and 2013 Equity Incentive Plan (the “2013 Plan”) for the six months ended June 30, 2017 is summarized as follows:

 

     Number
of Options
     Weighted-
Average
Exercise
Price
     Weighted-
Average
Remaining
Contractual
Term
(in years)
     Aggregate
Intrinsic
Value
(in thousands)
 

Outstanding at December 31, 2016

     1,577,016      $ 5.95        

Granted

     840,000        1.71        

Exercised

     —          —          

Cancelled

     (51,240      5.25        
  

 

 

    

 

 

    

 

 

    

 

 

 

Outstanding at June 30, 2017

     2,365,776      $ 4.47        8.6      $ 166  
  

 

 

    

 

 

    

 

 

    

 

 

 

Vested and expected to vest at June 30, 2017

     2,134,341      $ 4.60        8.5      $ 151  
  

 

 

    

 

 

    

 

 

    

 

 

 

Exercisable at June 30, 2017

     830,728      $ 6.10        7.7      $ 73  
  

 

 

    

 

 

    

 

 

    

 

 

 

As of June 30, 2017, the unrecognized compensation cost related to outstanding options was $2.3 million and is expected to be recognized as expense over approximately 1.98 years. As of June 30, 2017, the weighted average grant date fair value of vested options was $4.11 and the weighted average grant date fair value of options outstanding was $2.72.

The weighted average grant date fair value per share of employee option grants was $0.96 and $1.07 for the three months ended June 30, 2017 and 2016, respectively, and $1.01and $1.42 for the six months ended June 30, 2017 and 2016, respectively.

Restricted stock awards under the 2012 Plan and 2013 Plan for the six months ended June 30, 2017 are summarized as follows:

 

     Number of
Shares
     Weighted Average
Grant Date Fair
Value
 

Unvested at December 31, 2016

     1,889      $ 0.83  

Vesting of restricted stock

     (1,889      0.83  
  

 

 

    

 

 

 

Unvested at June 30, 2017

     —        $ —    
  

 

 

    

 

 

 

Stock-Based Compensation Expense

The Company granted stock options to employees during the three and six months ended June 30, 2017 and 2016. The Company estimates the fair value of stock options as of the date of grant using the Black-Scholes option pricing model and restricted stock based on the stock price, with the exception of those stock options that included a market condition. The Company estimates the fair value of stock options that include a market condition using a Monte-Carlo model. Stock options and restricted stock issued to non-board member, non-employees are accounted for using the fair value approach and are subject to periodic revaluation over their vesting terms.

Stock-based compensation expense amounted to $0.4 million and $0.3 million for the three months ended June 30, 2017 and 2016, respectively, and $0.9 million and $0.6 million for the six months ended June 30, 2017 and 2016, respectively.

The allocation of stock-based compensation for all options granted and restricted stock awards is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2017      2016      2017      2016  
     (in thousands)      (in thousands)  

Research and development

   $ 129      $ 123      $ 240      $ 238  

General and administrative

     242        213        624        409  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 371      $ 336      $ 864      $ 647  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Stock-based compensation by award type is as follows:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2017      2016      2017      2016  
     (in thousands)      (in thousands)  

Stock options

   $ 371      $ 336      $ 864      $ 646  

Restricted stock

     —          —          —          1  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 371      $ 336      $ 864      $ 647  
  

 

 

    

 

 

    

 

 

    

 

 

 

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2017     2016     2017     2016  

Risk-free interest rate

     1.88     1.35     2.03     1.40

Expected volatility

     60.2     65.8     63.2     59.6

Expected term (in years)

     6.08       6.08       6.08       6.08  

Expected dividend yield

     0.0     0.0     0.0     0.0

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the non-employee stock option grants were as follows:

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2017     2016     2017     2016  

Risk-free interest rate

     1.35     1.56     1.14     1.61

Expected volatility

     59.7     62.9     69.5     63.8

Expected term (in years)

     6.08       6.95       6.08       7.02  

Expected dividend yield

     0.0     0.0     0.0     0.0