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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2014
Stock-Based Compensation |
Stock-Based Compensation | 15.Stock-Based Compensation As of December 31, 2014, the Company had non-plan options to purchase an aggregate of 3,648,247 shares of common stock outstanding. Options are granted with exercise prices equal to the fair value of the common stock on the date of grant. The Company recognizes the fair value of stock-based awards granted in exchange for employee and non-employee services as a cost of those services. The Company recognizes stock-based compensation expense for option awards on a straight-line basis over the vesting period. The following table summarizes the stock option compensation expense for employees and non-employees recognized in the Company’s consolidated statements of operations for the period:
|  | December 31, |  | December 31, |
|  | 2014 |  | 2013 |
Research and development |  | $ | 526,331 |  | $ | — |
General and administrative |  | 1,080,616 |  | 2,225,989 |
Total stock based compensation expense |  | $ | 1,606,947 |  | $ | 2,225,989 |
The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of estimates, including the expected life of stock options, expected stock price volatility, the risk-free interest rate and the expected dividend yield. The Company calculates the expected life of stock options using the “simplified method” described in Staff Accounting Bulletin (“SAB”) Topic 14, Share-Based Payment, where the expected term of awards granted is based on the midpoint between the vesting date and the end of the contractual term, as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The expected stock price volatility assumption was estimated based upon historical volatility of the common stock of a group of the Company’s peers that are publicly traded. Using this assumption was based upon repositioning itself as a specialty biopharmaceutical company in the fourth quarter of 2013. The risk-free interest rate was determined using U.S. Treasury rates with terms consistent with the expected life of the stock options. Expected dividend yield is not considered, as the Company has never paid dividends and currently has no plans of doing so during the term of the options. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data when available to estimate pre-vesting option forfeitures, and records stock-based compensation expense only for those awards that are expected to vest. The weighted-average fair value of the Company’s options granted to employees was $3.71 and $3.00 per share, in 2014 and 2013, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model using the following weighted-average assumptions:
|  | 2014 |  | 2013 |
Risk-free interest rate |  | 1.82% - 2.03% |  | 0.35% |
Expected life in years |  | 6.0 |  | 5.0 |
Expected volatility |  | 70% - 71% |  | 141% |
Expected dividend yield |  | — |  | — |
As of December 31, 2014, the Company had $6,113,005 of total unrecognized compensation cost related to unvested stock-based compensation arrangements granted to employees. That cost is expected to be recognized over a weighted-average service period of 2.39 years. Per share exercise prices for options outstanding at December 31, 2014 and 2013, ranged from $2.50 to $54.00. Stock options outstanding that have vested or are expected to vest as of December 31, 2014 were as follows:
|  | Shares of Common Stock |  | Weighted- Average Per Share Exercise Price |  | Weighted- Average Remaining Contractual Life (in years) |  | Aggregate Intrinsic Value |
Vested |  | 1,072,111 |  | $ | 9.49 |  | 7.2 |  | $ | 143,013 |
Expected to vest |  | 2,576,136 |  | 3.75 |  | 9.5 |  | 283,921 |
Total |  | 3,648,247 |  | $ | 5.44 |  | 8.8 |  | $ | 426,934 |
The aggregate intrinsic value amounts represent the difference between the exercise price and $3.30, the fair value of our stock on December 31, 2014, for in-the-money options A summary of the Company’s employee stock option activity is as follows:
|  | Outstanding |  | Exercisable |
|  | Number of Shares |  | Weighted- Average Per Share Exercise Price |  | Weighted- Average Remaining Contractual life (in years) |  | Number of Shares |  | Weighted- Average Per Share Exercise Price |  | Weighted- Average Remaining Contractual life (in years) |
Outstanding at January 1, 2013 |  | 79,436 |  | $ | 46.00 |  | 3.0 |  | 57,310 |  | $ | 48.00 |  | 2.6 |
Granted |  | 310,000 |  | 3.00 |  |  |  |  |  |  |  |  |
Exercised |  | — |  | — |  |  |  |  |  |  |  |  |
Forfeited or expired |  | — |  | — |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2013 |  | 389,436 |  | $ | 11.77 |  | 3.9 |  | 367,110 |  | $ | 11.10 |  | 3.9 |
Granted |  | 3,287,181 |  | 3.71 |  |  |  |  |  |  |  |  |
Exercised |  | — |  | — |  |  |  |  |  |  |  |  |
Forfeited or expired |  | (28,370 | ) | 33.99 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2014 |  | 3,648,247 |  | $ | 5.44 |  | 8.8 |  | 1,072,111 |  | $ | 9.49 |  | 7.2 |

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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 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: 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 3: 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=6406099&loc=d3e25284-112666 Reference 4: 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 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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