9. Stock Based Compensation

We have a 2000 Long-Term Incentive Plan, which expired on August 6, 2010. As of March 31, 2016, there were approximately 0.6 million shares subject to outstanding stock options under this plan. No further shares are available for future grant under this plan.

We also had a 2008 Stock Incentive Plan. As of March 31, 2016, there were 13.7 million shares subject to outstanding stock options and 6.3 million shares available for future grant under this plan.

We follow ASC 718, Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees.

For stock options and stock warrants paid in consideration of services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50.

Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period, the value of these options, as calculated using the Black-Scholes option-pricing model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. Since the fair market value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense is subject to adjustment until the common stock options are fully vested.

The following table sets forth the total stock-based compensation expense resulting from stock options and warrants included in our unaudited interim statements of operations:

	Three Months Ended March 31,
	2016		2015
Research and development — employee	$	480,811	$	335,938
General and administrative — employee		657,050		955,404
Total employee stock-based compensation	$	1,137,861	$	1,291,342

Research and development — non-employee	$	—	$	—
General and administrative — non-employee		187,956		93,551
Total non-employee stock-based compensation	$	187,956	$	93,551

During the three-month period ended March 31, 2016, we granted stock options to purchase 425,000 shares of our common stock and warrants to purchase 500,000 shares of our common stock at an average exercise price of $1.74, and during the corresponding 2015 period, we granted stock options to purchase 180,000 shares of our common stock. The fair value of the stock options and warrants was estimated using the Black-Scholes option-pricing model, based on the following assumptions:

	Three months Ended March 31, 2016			Three Months Ended March 31, 2015
Risk-free interest rate		1.47	%		2.20	%
Expected volatility		76.3	%		84.3	%
Expected lives (years)		5 - 10			10
Expected dividend yield		0.00	%		0.00	%

We compute expected volatility based on the historical daily volatility of our publicly traded stock. We use historical information to compute expected lives. In the three-month period ended March 31, 2016, the contractual term and the expected life of the options granted were ten years. The dividend yield assumption of zero is based upon the fact we have never paid cash dividends and presently have no intention to do so. The risk-free interest rate used for each grant and issuance is equal to the U.S. Treasury rates in effect at the time of the grant and issuance for instruments with a similar expected life. Based on historical experience, for the three-month period ended March 31, 2016, we estimated an annualized forfeiture rate of 10% for options granted to our employees, 2% for options granted to senior management and 0% for warrants issued to non-employees. For the three-month period ended March 31, 2015, we estimated an annualized forfeiture rate of 0% for options granted to directors. Compensation costs will be adjusted for future changes in estimated forfeitures. We will record additional expense if the actual forfeitures are lower than estimated and will record a recovery of prior expense if the actual forfeitures are higher than estimated. No amounts relating to stock-based compensation have been capitalized.

As of March 31, 2016, there remained approximately $7.1 million of unrecognized compensation expense related to unvested stock options granted to current employees, which we expect will be recognized over a weighted-average period of 1.18 years. Presented below is our stock option activity:

	Three months Ended March 31, 2016
	Number of Options (Employees)			Number of Options (Non-Employees)		Total Number of Options			Weighted-Average Exercise Price
Outstanding at January 1, 2016		13,573,862			635,714		14,209,576		$	3.10
Granted		425,000			—		425,000		$	2.22
Exercised, forfeited or expired		(312,571	)		—		(312,571	)	$	4.10
Outstanding at March 31, 2016		13,686,291			635,714		14,322,005		$	3.05
Exercisable at March 31, 2016		8,307,207			635,714		8,942,921		$	3.36

The following table summarizes significant ranges of outstanding stock options under our plans at March 31, 2016:

Range of Exercise Prices		Number of Options		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Number of Options Exercisable		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price
$	1.75 - $2.00		1,274,500		6.70	$	1.83		1,274,500		6.70	$	1.83
$	2.01 – $2.50		8,565,558		8.92	$	2.32		3,734,284		8.38	$	2.30
$	2.51 – $4.00		1,058,407		7.97	$	2.86		917,574		7.78	$	2.86
$	4.01 – $32.55		3,423,540		6.76	$	5.39		3,016,563		6.63	$	5.47
			14,322,005		8.14	$	3.05		8,942,921		7.49	$	3.36

The aggregate intrinsic values of outstanding options and options vested as of March 31, 2016 were $4.2 million and $2.5 million respectively, which represents the excess of the aggregatve fair market value of the underlying common stock on March 31, 2016 of $2.68 per share over the aggregate price of the options .

There were 8,359,618 and 7,225,472 warrants outstanding at March 31, 2016 and December 31, 2015, respectively at a weighted-average exercise price of $3.96 and $4.28, respectively.