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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation

10. Stock-Based Compensation

The Company sponsors the Pulmatrix, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan). As of March 31, 2017, the 2013 Plan provides for the grant of up to 4,193,075 shares of Company Common Stock, of which 1,149,194 shares remained available for future grant.

In addition, the Company has two legacy plans: The Pulmatrix Operating’s 2013 Employee, Director and Consultant Equity Incentive Plan (the “Original 2013 Plan”) and Pulmatrix Operating’s 2003 Employee, Director, and Consultant Stock Plan (the “2003 Plan”). As of March 31, 2017, a total of 503,062 shares of Company Common Stock may be delivered under options outstanding under the Original 2013 Plan and the 2003 Plan, however no additional awards may be granted under the Original 2013 Plan or the 2003 Plan.

 

Options

During the first three months of 2017, the Company granted options to purchase 343,555 shares of Company Common Stock to employees and options to purchase 22,000 shares of Company Common Stock to directors. At the date of grant the fair value of those options aggregated to $659 and $42 respectively. The stock options granted vest over 48 months (the “Time Based Options”). Subject to the grantees’ continuous service with the Company, Time Based Options vest 25% on the first anniversary of the option grant date and the remainder in 36 equal monthly installments beginning in the month after the vesting start date. Stock options generally expire ten years after the date of grant.

The following table summarizes stock option activity for the three months ended March 31, 2017:

 

     Number of
Options		      Weighted-
Average
Exercise
Price		      Weighted-
Average
Remaining
Contractual
Term
( Years)		      Aggregate
Intrinsic
Value		  

Outstanding — January 1, 2017

      2,829,301      $ 6.89         $ —    

Granted

      365,555      $ 2.78        

Exercised

      (136,249 )     $ 2.19        

Forfeited or expired

      (54,822 )     $ 7.69        
  

 

 

           

Outstanding — March 31, 2017

      3,003,785      $ 6.59        8.08      $ 1,496  
  

 

 

           

Exercisable — March 31, 2017

      1,437,144      $ 6.99        7.23      $ 846  
  

 

 

           

Vested and expected to vest — March 31, 2017

      2,956,125      $ 6.56        8.08      $ 1,485  
  

 

 

           

The estimated fair values of employee stock options granted during the three months ended March 31, 2017 and 2016, were determined on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

 

     Three Months Ended March 31,
     2017    2016

Expected option life (years)

    5.80 – 6.71    6.22

Risk-free interest rate

    2.10% - 2.23%    1.61% -1.94%

Expected volatility

    76.6% - 79.9%    70.0%

Expected dividend yield

    0%    0%

The risk-free interest rate was obtained from U.S. Treasury rates for the applicable periods. The Company’s expected volatility was based upon the historical volatility for industry peers and used an average of those volatilities. The expected life of the Company’s options was determined using the simplified method as a result of limited historical data regarding the Company’s activity. The dividend yield considers that the Company has not historically paid dividends, and does not expect to pay dividends in the foreseeable future. As of March 31, 2017 there was $5,636 of unrecognized stock-based compensation expense related to unvested stock options granted under the Company’s stock award plans. This expense is expected to be recognized over a weighted-average period of approximately 2.3 years.

The following table presents total stock-based compensation expense for the three months ended March 31, 2017:

 

     Three Months Ended
March 31,		  
     2017      2016  

Research and development

    $ 153      $ 214  

General and administrative

      462        1,019  
  

 

 

     

 

 

  

Total stock based compensation expense

    $ 615      $ 1,233  

Restricted Stock Units (RSU)

In August 2015, the Company granted 10,374 RSUs to other employees that vest over a two year period. The Company recorded stock-based compensation expense of $7 for the RSUs during the three months ended March 31, 2017. At March 31, 2017, 5,187 RSUs were outstanding with a weighted-average grant date fair value of $5.50 per share and total grant date fair value of $29.