Quarterly report pursuant to Section 13 or 15(d)

Stock Plans

Stock Plans

6 Months Ended

Jun. 30, 2017

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, 2017 and 2016:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2017		2016		2017		2016
Research and development	$	128	$	85	$	245	$	217
General and administrative		254		164		558		364
Total stock-based compensation expenses	$	382	$	249	$	803	$	581

No tax benefit was recognized related to stock-based compensation expense since we have accumulated 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, 2017 and 2016:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Weighted-average risk-free interest rate		2.0	%		1.5	%		2.1	%		1.5	%
Expected dividend payments		—			—			—			—
Expected holding period (years) ¹		6.5			6.5			6.5			6.5
Weighted-average volatility factor ²		0.88			0.92			0.88			0.92
Estimated forfeiture rates ³		27	%		29	%		28	%		29	%

(1)

Expected holding period is based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and the expectations of future employee behavior.

(2)

Weighted average volatility is based on the historical volatility of our common stock.

(3)

Estimated forfeiture rates are based on historical data.

Options to purchase approximately 60,000 shares of common stock were granted during the three-month period ended June 30, 2017. No options were granted during the three-month period ended June 30, 2016. Options to purchase approximately 496,000 and 168,000 shares of common stock were granted during the six-month periods ended June 30, 2017 and 2016, respectively.

The following table summarizes option activity for the six-month period ended June 30, 2017:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Option		Intrinsic
(in thousands, except per share amounts)	Options		Price		Term		Value
Outstanding at January 1, 2017		2,002	$	5.67		5.68	$	203
Granted		496		3.70
Exercised		—		—
Expired or cancelled		(19)		13.43
Forfeited		—		—

Outstanding at June 30, 2017		2,479	$	5.22		6.13	$	—

Exercisable at June 30, 2017		1,938	$	5.54		5.23	$	—

No shares of restricted stock were awarded to employees, directors and consultants during the three and six-month periods ended June 30, 2017 and 2016.

As of June 30, 2017, there was approximately $1.0 million of total unrecognized compensation expense related to non-vested stock options. This expense is expected to be recognized over a weighted-average period of 1.3 years.