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Stock-based compensation
 6 Months Ended
Jun. 30, 2013
Stock-based compensation  
Stock-based compensation

6.                                      Stock-based compensation

 

The following table summarizes share-based compensation expense included within our condensed consolidated statements of operations:

 

 

 

 

 

 

 

 

 

 

 

Period

 

 

 

 

 

 

 

 

 

 

 

from April 5,

 

 

 

Three Months

 

Six Months

 

2011

 

 

 

Ended,

 

Ended,

 

(inception)

 

 

 

June 30,

 

June 30,

 

to June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

Research and development

 

$

609

 

$

256

 

$

1,035

 

$

493

 

$

2,447

 

General and administrative

 

765

 

43

 

1,176

 

113

 

1,492

 

 

On December 5, 2012, we issued a total of 192,308 restricted stock units (“RSUs”) to its Chief Executive Officer. This grant included 128,205 RSUs with time-based vesting as follows: 16,025 shares on March 31, 2013 and 16,025 shares each quarter thereafter until December 31, 2014. The grant also included 64,103 RSUs that will vest only upon the achievement of performance conditions that relate to 2013 and 2014 as determined by our board of directors. On March 20, 2013, the board of directors established the 2013 performance criteria for the first tranche of the award and communicated the performance criteria to the grant recipient. The weighted average exercise price is $0.001 per share for these awards, and the grant date stock price was $10.00 per share. We have reviewed the performance conditions and deemed the conditions probable of achievement. The fair value of the time-based RSUs is based on the closing price of our common stock on the award date, or $7.80 per share. The stock-based compensation expense for this grant is being recognized on a straight-line basis over the vesting period for the portion of the award that is probable of vesting. The Company recognized total stock-based compensation for the time-based awards and performance based awards of $220,311 and $351,439 for the three and six months ended June 30, 2013.

 

Included within the general and administrative expense for the three and six months ended June 30, 2013 is expense related to the RSUs with performance-based vesting provisions that will vest on December 31, 2013, based on our determination that certain defined performance metrics are probable of achievement.  The performance metrics for the RSUs that will vest on December 31, 2014 have not been established and therefore we have not recorded any expense related to those RSUs.

 

The fair value of each stock-based option award is estimated on the grant date using the Black-Scholes option pricing model using the following assumptions:

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Volatility

 

83 - 86%

 

84 - 87%

 

83 – 91%

 

84 - 87%

 

Risk-free interest rate

 

1.2 – 1.4%

 

0.8 - 1.2%

 

0.9 – 1.4%

 

0.8 - 1.2%

 

Dividend yield

 

—

 

—

 

—

 

—

 

Expected term

 

5.3 - 6.1

 

5.1 - 6.1

 

5.3 - 6.1

 

5.1 - 6.1

 

 

The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The representative group of companies consisted of NeoGenomics, Inc., StemCells, Inc., BioSante Pharmaceuticals, Inc., Sangamo Biosciences, Inc., and Concept Therapeutics, Inc. As a result of being a development stage company in a very early stage of product development with no revenues, the representative group of companies has certain similar, but not all similar, characteristics to the Company. We believe the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of OvaScience.

 

As of June 30, 2013, we had approximately $14.2 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options and restricted stock units, which are expected to be recognized over a weighted-average period of 3.0 years.

 

During the three and six months ended June 30, 2013, we granted options to purchase 403,880 and 841,422 shares of our common stock at a weighted average grant date fair value of $9.90 and $9.65, respectively, and with a weighted average exercise price of $14.00 and $13.37, respectively. During the three and six months ended June 30, 2012, we granted options to both employees and non-employees to purchase 94,120  and 167,275 shares of our common stock, respectively and with a weighted average exercise price of $4.53 and $4.30, respectively. The employee options were granted at a weighted average fair value of $3.35 and $3.15, for the three and six months ended June 30, 2012, respectively. The non-employee options are subject to mark-to-market accounting at the end of each period.