6.	STOCK-BASED COMPENSATION

In March 2014, the Company’s board of directors adopted and its stockholders approved the 2014 Stock Incentive Plan (the “2014 Plan”) and the 2014 Employee Stock Purchase Plan (the “ESPP”), which became effective in April 2014. The 2014 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.

Stock Options

A summary of stock option activity for employee, director and nonemployee awards under all stock option plans during the three months ended March 31, 2016 is presented below (Aggregate Intrinsic Value in thousands):

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding — January 1, 2016		3,454,926		$	5.39		8.9	$	—
Granted		547,070			2.98
Exercised		—			—
Forfeited		(10,410	)		4.88
Outstanding — March 31, 2016		3,991,586		$	5.06		8.8	$	19
Options expected to vest — March 31, 2016		2,695,996		$	4.79		9.3	$	18
Options exercisable — March 31, 2016		1,159,945		$	5.72		7.7	$	—

The weighted-average per share grant date fair value of options granted during the three months ended March 31, 2016 and 2015 was $1.70 and $5.07, respectively.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions noted in the table below. Expected volatility for the Company’s common stock was determined based on an average of the historical volatility of a peer-group of similar public companies. The Company has limited option exercise information, and as such, the expected term of the options granted was calculated using the simplified method that represents the average of the contractual term of the option and the weighted-average vesting period of the option. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The risk-free rate for periods within the contractual life of the option is based upon the U.S. Treasury yield curve in effect at the time of grant.

The Company has recorded stock-based compensation expense related to the issuance of stock option awards to employees of $691,000 and $420,000 for the three months ended March 31, 2016 and 2015, respectively. The assumptions used in the Black-Scholes option-pricing model for stock options granted to employees and to directors in respect of board services during the three months ended March 31, 2016 and 2015 are as follows:

	Three Months Ended March 31,
	2016	2015
Expected life	5.9-6.1 years	6 years
Risk-free interest rate	1.31%-1.89%	1.45%-1.69%
Expected volatility	61%	61%-63%
Expected dividend rate	—%	—%

The Company recorded stock-based compensation expense related to nonemployee awards of $38,000 and $20,000 for the three months ended March 31, 2016 and 2015, respectively. The compensation expense related to nonemployee awards is included in the total stock-based compensation each year and is subject to re-measurement until the options vest. The Black-Scholes assumptions used to estimate fair value for the three months ended March 31, 2016 and 2015 were as follows:

	Three Months Ended March 31,
	2016	2015
Expected life	6.9-9.7 years	8 years
Risk-free interest rate	1.7%-2.0%	1.86%
Expected volatility	60%-61%	62%
Expected dividend rate	—%	—%

Employee Stock Purchase Plan

The ESPP permits eligible employees to enroll in a six-month offering period whereby participants may purchase shares of the Company’s common stock, through payroll deductions, at a price equal to 85% of the closing price of the common stock on the first day of the offering period or the last day of the offering period, whichever is lower. Purchase dates under the ESPP occur on or about June 30 and December 31 of each year. The first offering period under the ESPP opened on July 1, 2015. During the three months ended March 31, 2016, 17,185 shares of common stock were purchased under the ESPP at a price of $2.38 per share. The stock-based compensation expense related to the ESPP for the three months ended March 31, 2016 was $12,000. There was no stock-based compensation related to the ESPP recorded for the three months ended March 31, 2015.