Quarterly report pursuant to Section 13 or 15(d)

Stock Plans

Stock Plans

6 Months Ended

Jun. 30, 2015

2. Stock Plans

The following table summarizes the stock-based compensation expense recorded for awards under the stock option plans for the three and six month periods ended June 30, 2015 and 2014:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2015		2014		2015		2014
Research and development	$	35	$	28	$	238	$	173
General and administrative		41		32		329		213
Total stock-based compensation expenses	$	76	$	60	$	567	$	386

No tax benefit was recognized related to stock-based compensation expense since we have incurred operating losses and we have established a full valuation allowance to offset all the potential tax benefits associated with our deferred tax assets.

We use the Black-Scholes-Merton option-pricing model with the following assumptions to estimate the stock-based compensation expense for the three and six month periods ended June 30, 2015 and 2014:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Weighted-average risk-free interest rate		1.7	%		1.7	%		1.8	%		2.0	%
Expected dividend payments		—			—			—			—
Expected holding period (years) ¹		4.5			4.2			6.4			6.5
Weighted-average volatility factor ²		1.65			1.67			1.61			1.66
Estimated forfeiture rates ³		30	%		31	%		30	%		31	%

	(1)	Expected holding periods are based on the simplified method provided in Staff Accounting Bulletin No. 107 for “plain vanilla options.”
	(2)	Weighted average volatility is based on the historical volatility of our common stock.
	(3)	Estimated forfeiture rates are based on historical data.

No options were granted during the three month periods ended June 30, 2015 and 2014.

The following table summarizes option activity for the six month period ended June 30, 2015:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Option		Intrinsic
(in thousands, except per share amounts)	Options		Price		Term		Value
Outstanding at January 1, 2015		6,620	$	1.23		5.14	$	1
Granted		1,374		0.60
Exercised		—		—
Expired or cancelled		(70)		2.62
Forfeited		—		—

Outstanding at June 30, 2015		7,924	$	1.11		5.58	$	147

Exercisable at June 30, 2015		7,250	$	1.15		5.19	$	78

No shares of restricted stock were awarded to employees, directors and consultants during the three month periods ended June 30, 2015 and 2014.

The following table summarizes restricted stock activity for the six month period ended June 30, 2015:

			Weighted		Weighted
			Average		Average		Aggregate
	Restricted		Exercise		Remaining		Intrinsic
(in thousands, except per share amounts)	Stock		Price		Term		Value
Outstanding at January 1, 2015		359	$	—		9.12	$	166
Granted		—		—
Released		(359)		—
Expired or cancelled		—		—
Forfeited		—		—

Outstanding at June 30, 2015		—	$	—		—	$	—

Exercisable at June 30, 2015		—	$	—		—	$	—

As of June 30, 2015, there was approximately $205,000 of total unrecognized compensation expense related to non-vested stock options and restricted stock. This expense is expected to be recognized over a weighted-average period of 0.7 years.