10.Stock-based compensation

Prior to the Company’s IPO, the Company granted awards to eligible participants under the 2008 equity incentive plan (“2008 Plan”). In June 2015, the Company’s board of directors adopted and the Company’s stockholders approved the 2015 Stock Incentive Plan (“2015 Plan”), which became effective immediately prior to the effectiveness of the Company’s IPO. Subsequent to the Company’s IPO, option grants are awards to eligible participants only under the 2015 Plan.

The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards under the 2015 Plan. The maximum number of shares of Common Stock that may be delivered in satisfaction of awards under the 2015 Plan is 1,068,287 shares, plus (1) 25,942 shares that were available for grant under the 2008 Plan immediately prior to the closing of the IPO, (2) the number of shares of Common Stock subject to outstanding awards under the 2008 Plan upon closing of the IPO that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right and (3) an annual increase, to be added the first day of each fiscal year, beginning with the fiscal year ending December 31, 2016 and continuing until, and including, the fiscal year ending December 31, 2025, equal to the lowest of 1,297,334 shares of Common Stock, 4% of the number of shares of Common Stock outstanding on the first day of the fiscal year and an amount determined by the Company’s board of directors.

As of June 30, 2015, the Company had reserved 1,478,731 shares of Common Stock under the 2008 Plan, of which none remained available for future issuance. As of June 30, 2015, the Company had reserved 1,094,228 shares of Common Stock under the 2015 Plan, of which 1,038,758 shares remained available for future issuance.

Stock Options

A summary of the Company’s stock option activity and related information follows:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Agregate Intrinsic Value (in 000’s)
Outstanding at December 31, 2014	1,226,140		$	4.14	8.15	$	6,579
Granted	360,530		10.64
Exercised	(25,045	)	2.05
Cancelled or forfeited	(27,424	)	4.09

Outstanding at June 30, 2015	1,534,201		$	5.70	8.16	$	9,980

Exercisable at June 30, 2015	690,832		$	3.06	7.02	$	6,318

Vested or expected to vest at June 30, 2015	1,410,518		$	5.46	8.06	$	9,524

The total intrinsic value of options exercised for the three months ended June 30, 2015 and 2014 was $0, and $7,000, respectively. The total intrinsic value of options exercised for the six months ended June 30, 2015 and 2014 was $0.2 million and $28 thousand, respectively. The total fair value of options vested for the three months ended June 30, 2015 and 2014 was $0.2 million and $0.1 million, respectively. The total fair value of options vested for the six months ended June 30, 2015 and 2014 was $0.8 million and $0.3 million, respectively.

At June 30, 2015, the total unrecognized compensation expense related to unvested stock option awards, including estimated forfeitures, was $4.2 million. The Company expects to recognize that cost over a weighted-average period of approximately 3.0 years.

Stock-based compensation expense

Total stock-based compensation expense is recognized for stock options granted to employees and non-employees and has been reported in the Company’s statements of operations as follows (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014

Research and development	$	165	$	109	$	333	$	189
General and administrative	189		119		322		184

Total	$	354	$	228	$	655	$	373

Employee Stock Purchase Plan

In June 2015, the Company’s board of directors adopted and the Company’s stockholders approved the 2015 Employee Stock Purchase Plan (the “2015 ESPP”) which became effective upon closing of the Company’s IPO. The 2015 ESPP authorizes the initial issuance of up to a total of 182,352 shares of Common Stock to participating eligible employees. The number of shares increases each January 1, commencing on January 1, 2016 and ending on December 31, 2026, by an amount equal to the lesser of one percent of the outstanding shares as of the end of the immediately preceding fiscal year, 364,705 shares and any lower amount determined by the Company’s board of directors. As of June 30, 2015 there has been no activity under the 2015 ESPP.