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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation | Note 11. Stock-Based Compensation We currently grant stock-based compensation under two equity incentive plans (2006 and 2013 Equity Incentive Plans) approved by the Company’s stockholders and one plan adopted in 2012 pursuant to NASDAQ Listing Rule 5635(c)(4) concerning inducement grants for new employees (our “2012 Commencement Incentive Plan”). As of December 31, 2015, we had 6,207,871 shares available to grant under the above mentioned plans. At our annual stockholders meeting held on June 12, 2007, our stockholders approved an amendment to our 2006 Equity Incentive Plan to provide for an annual increase in the number of shares of common stock available for issuance under the plan each January 1 (beginning January 1, 2008) equal to 4% of the outstanding common shares as of that date. The amendment further provided an aggregate limit of 3,000,000 shares issuable pursuant to incentive stock option awards under the plan. At our annual stockholders meeting held on December 20, 2013, our stockholders approved our 2013 Equity Incentive Plan to grant stock-based compensation of up to an initial 6,000,000 shares, plus an increase of 4% per year of the outstanding number of shares of our common stock beginning in January 1, 2015. Under the two stockholder-approved plans we may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, 401(k) Plan employer match in form of shares and performance-based shares to our employees, directors and consultants, at prices determined by our Board of Directors. Incentive stock options may only be granted to employees under these plans with a grant price not less than the fair market value on the date of grant. Under our 2012 Commencement Inducement Plan, we may only award options, restricted stock units and other equity awards to newly hired employees and newly engaged directors, in each case as allowed by NASDAQ listing requirements. Generally, stock options and restricted stock units granted to employees have a maximum term of ten years. Stock based awards may vest over a period of time from the date of grant or upon the attainment of certain performance goals established by the Compensation Committee or the Single Member Committee established under our 2006 Equity Incentive Plan and our 2013 Equity Incentive Plan. Upon employee termination of service, any unexercised vested option will be forfeited three months following termination or the expiration of the option, whichever is earlier. Our stock-based compensation expense for the last three fiscal years was as follows:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Research and development expense |  | $ | 1,873,848 |  |  | $ | 608,840 |  |  | $ | 1,219,308 |
General and administrative expense |  |  | 2,370,560 |  |  |  | 1,426,058 |  |  |  | 1,389,362 |
Total stock-based compensation expense and effect on net loss |  | $ | 4,244,408 |  |  | $ | 2,034,898 |  |  | $ | 2,608,670 |
As of December 31, 2015, we have approximately $5,924,000 of total unrecognized compensation expense related to unvested awards granted under our various share-based plans that we expect to recognize over a weighted-average period of 1.7 years. The fair value of stock options and restricted stock units granted is estimated as of the date of grant using the Black-Scholes option pricing model and expensed on a pro-rata straight-line basis over the period in which the stock options vest. The Black-Scholes option pricing model requires certain assumptions as of the date of grant. The weighted-average assumptions used for the last three fiscal years are as follows:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Expected term (years)(1) |  |  | 5.7 |  |  |  | 4.2 |  |  |  | 5.1 |
Risk-free interest rate(2) |  |  | 1.8 | % |  |  | 1.3 | % |  |  | 1.2 | %
Expected volatility(3) |  |  | 75.2 | % |  |  | 78.7 | % |  |  | 89.3 | %
Expected dividend yield(4) |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
(1) | The expected term represents the period during which our stock-based awards are expected to be outstanding. We estimated this amount based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting requirements, and expectation of future employee behavior, including post-vesting terminations.
(2) | The risk-free interest rate is based on U.S. Treasury debt securities with maturities close to the expected term of the option as of the date of grant.
(3) | Expected volatility is based on historical volatility over the most recent historical period equal to the length of the expected term of the option as of the date of grant.
(4) | We have neither declared nor paid dividends on any share of common stock and we do not expect to do so in the foreseeable future.
At the end of each reporting period, we estimate forfeiture rates based on our historical experience within separate groups of employees and adjust the stock-based compensation expense accordingly. A summary of our stock option activity and related information for the last three fiscal years is as follows:
|  | Outstanding Options |
|  | Number of Shares |  |  | Weighted- Average Exercise Price |  |  | Weighted-Average Remaining Contractual Term |  |  | Aggregate Intrinsic Value(1) |
Balance at December 31, 2012 |  |  | 447,359 |  |  | $ | 19.59 |  |  |  | 5.1 |  |  | $ | 2,175 |
Granted |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |
Exercised |  |  | (3,452 | ) |  | $ | 1.00 |  |  |  |  |  |  | $ | 2,214 |
Cancelled (forfeited and expired) |  |  | (15,649 | ) |  | $ | 13.06 |  |  |  |  |  |  |  |  |
Balance at December 31, 2013 |  |  | 428,258 |  |  | $ | 19.97 |  |  |  | 4.3 |  |  | $ | — |
Granted |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |
Cancelled (forfeited and expired) |  |  | (125,529 | ) |  | $ | 24.30 |  |  |  |  |  |  |  |  |
Balance at December 31, 2014 |  |  | 302,729 |  |  | $ | 18.18 |  |  |  | 3.3 |  |  | $ | — |
Granted |  |  | 2,595,000 |  |  | $ | 0.69 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |
Cancelled (forfeited and expired) |  |  | (818,600 | ) |  | $ | 1.57 |  |  |  |  |  |  |  |  |
Balance at December 31, 2015 |  |  | 2,079,129 |  |  | $ | 2.89 |  |  |  | 8.6 |  |  | $ | 1,800 |
Exercisable at December 31, 2015 |  |  | 399,129 |  |  | $ | 12.14 |  |  |  | 4.9 |  |  | $ | 360 |
Vested and expected to vest(2) |  |  | 1,873,521 |  |  | $ | 3.134 |  |  |  | 8.5 |  |  | $ | 1,620 |
(1) | Aggregate intrinsic value represents the value of the closing price per share of our common stock on the last trading day of the fiscal period in excess of the exercise price multiplied by the number of options outstanding or exercisable, except for the “Exercised” line, which uses the closing price on the date exercised.
(2) | Number of shares includes options vested and those expected to vest net of estimated forfeitures.
No options were granted in 2014 and 2013. Total intrinsic value of options exercised at time of exercise was approximately $2,000 in 2013. No options were exercised in 2014 and 2015. The following is a summary of changes in unvested options:
Unvested Options |  | Number of Options |  |  | Weighted Average Grant Date Fair Value |
Unvested options at December 31, 2014 |  |  | — |  |  |  | — |
Granted(1) |  |  | 2,595,000 |  |  | $ | 0.45 |
Vested |  |  | (135,000 | ) |  | $ | 0.44 |
Cancelled |  |  | (38,600 | ) |  | $ | 14.62 |
Unvested options at December 31, 2015 |  |  | 1,680,000 |  |  | $ | 9.97 |
The estimated fair value of options vested were approximately $59,000 in 2015, $138,000 in 2014 and $406,000 in 2013. The following table presents weighted average exercise price and remaining term information about significant option groups outstanding at December 31, 2015:
Options Outstanding at December 31, 2015 |
Range of Exercise Prices |  | Number Outstanding |  |  | Weighted Average Remaining Term (Yrs.) |  |  | Weighted Average Exercise Price |  |  | Aggregate Intrinsic Value at December 31, 2015 |
Less than $10.00 |  |  | 1,815,300 |  |  |  | 9.5 |  |  | $ | 0.69 |  |  | $ | 1,800 |
$10.00 - $19.99 |  |  | 140,870 |  |  |  | 4.0 |  |  | $ | 11.79 |  |  |  | — |
$20.00 - $29.99 |  |  | 106,159 |  |  |  | 1.1 |  |  | $ | 23.27 |  |  |  | — |
$30.00 - $39.99 |  |  | 16,800 |  |  |  | 0.1 |  |  | $ | 36.95 |  |  |  | — |
|  |  | 2,079,129 |  |  |  | 8.6 |  |  | $ | 2.9 |  |  | $ | 1,800 |
Vested Options Outstanding at December 31, 2015 |
Range of Exercise Prices |  | Number Outstanding |  |  | Weighted Average Exercise Price |
Less than $10.00 |  |  | 135,300 |  |  | $ | 0.70 |
$10.00 - $19.99 |  |  | 140,870 |  |  | $ | 11.79 |
$20.00 - $29.99 |  |  | 106,159 |  |  | $ | 23.27 |
$30.00 - $39.99 |  |  | 16,800 |  |  | $ | 36.95 |
|  |  | 399,129 |  |  | $ | 12.14 |
Restricted Stock Units We have granted restricted stock units (RSUs) to our directors and to certain employees which entitle the holders to receive shares of our common stock upon vesting of the RSUs. The fair value of restricted stock units granted are based upon the market price of the underlying common stock as if it were vested and issued on the date of grant. A summary of our restricted stock unit activity for the year ended December 31, 2015 is as follows:
|  | Number of RSUs |  |  | Weighted Average Grant Date Fair Value |
Unvested at January 1, 2015 |  |  | 3,374,940 |  |  | $ | 1.55 |
Granted(1) |  |  | 7,540,768 |  |  | $ | 1.10 |
Vested |  |  | (1,510,257 | ) |  | $ | 1.41 |
Cancelled |  |  | (1,154,100 | ) |  | $ | 1.22 |
Unvested at December 31, 2015 |  |  | 8,251,351 |  |  | $ | 1.21 |
(1) | All 2,595,000 options granted in 2015 vest upon the attainment of certain performance goals established by the Compensation Committee or the Single Member Committee established under our 2006 Equity Incentive Plan and our 2013 Equity Incentive Plan. A total of 7,540,768 restricted units were granted in 2015. 349,518 of these restricted stock units vest and convert into shares of our common stock after one year from the date of grant. 2,331,250 of these restricted stock units vest and convert into shares of our common stock over a three year period from the date of grant: one-third of the award will vest on each grant date anniversary following the grant. The remaining restricted units granted vest upon the attainment of certain performance goals established by the Compensation Committee or the Single Member Committee established under our 2006 Equity Incentive Plan and our 2013 Equity Incentive Plan.
Stock Appreciation Rights In July 2006, we granted cash-settled Stock Appreciation Rights (SARs) to certain employees that give the holder the right, upon exercise, to the difference between the price per share of our common stock at the time of exercise and the exercise price of the SARs. The SARs have a maximum term of ten years with an exercise price of $20.00, which is equal to the market price of our common stock at the date of grant. The SARs vest 25% on the first anniversary of the grant date and 75% vest monthly over the remaining three-year service period. All of the outstanding SARs as of December 31, 2015 are fully vested and there were no changes (grants, exercises or forfeitures) in the fourth quarter of 2015. Compensation expense is based on the fair value of SARs which is calculated using the Black-Scholes option pricing model. The stock-based compensation expense and liability are re-measured at each reporting date through the earlier of date of settlement or forfeiture of the SARs. For the year ended December 31, 2015, 2014 and 2013, the re-measured liability and compensation expense related to the SARs were not significant. The compensation expense recognized for the year ended December 31, 2015 and resulting effect on net loss and net loss per share attributable to common stockholders is not likely to be representative of the effects in future periods, due to changes in the fair value calculation which is dependent on the stock price, volatility, interest and forfeiture rates, additional grants and subsequent periods of vesting. We will continue to recognize compensation cost each period, which will be the change in fair value from the previous period through the earlier date of settlement or forfeiture of the SARs.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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