8. Stock-Based Compensation and Stock Options and Awards

The following table shows the stock-based compensation expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Costs and expenses:
Research and development	$	190	$	150	$	564	$	367
General and administrative		196		106		621		331

Total stock-based compensation expense	$	386	$	256	$	1,185	$	698

There was no capitalized stock-based employee compensation cost for the three and nine months ended September 30, 2016 and 2015. Since the Company did not record a tax provision during the quarters ended September 30, 2016 and 2015, there was no recognized tax benefit associated with stock-based compensation expense.

Stock Option Plans: 2005 Equity Incentive Plan (the “2005 Plan”), and 2015 Equity Incentive Plan (the “2015” Plan)

On March 13, 2015 the Board adopted and, on May 14, 2015 the Company’s shareholders approved, the 2015 Plan. The 2015 Plan replaces the Company’s 2005 Plan, which expired in March 2015. The 2015 Plan is intended to promote our long-term success and increase shareholder value by attracting, motivating, and retaining non-employee directors, officers, employees, advisors, consultants and independent contractors, and allows the flexibility to grant a variety of awards to eligible individuals, thereby strengthening their commitment to the Company’s success and aligning their interests with those of the Company’s shareholders. The Company did not request that shareholders authorize any new shares of Common Stock in connection with the approval of the 2015 Plan; rather, the shares authorized for issuance under the 2005 Plan were available for issuance under the 2015 Plan. In March 2016, the Company’s Board of Directors amended, and in June 2016 the Company’s shareholders approved, the amendment to the 2015 Plan increasing the shares of common stock authorized for issuance by 2,400,000 shares.

Stock Option Activity

The following is a summary of activity under the 2005 Plan and the 2015 Plan for the nine months ended September 30, 2016:


	Shares Available for Future Grant
Balance at January 1, 2016		252,725
Increase in authorized shares		2,400,000
Options granted		(765,323	)
Options cancelled		26,697
Awards granted		(166,000	)

Balance at September 30, 2016		1,748,099


	Options Outstanding
	Number of Shares			Weighted Average Exercise Price		Weighted Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2016		947,142		$	11.40
Options granted		765,323		$	4.15
Options cancelled		(26,697	)	$	73.58

Outstanding at September 30, 2016		1,685,768		$	7.12		8.33	$	2,163,183

Exercisable at September 30, 2016		516,392		$	10.29		7.00	$	152,582

During the nine months ended September 30, 2016, zero stock options were exercised. Included in the $2.2 million of intrinsic value are performance options, which account for $1.7 million of the total. The vesting of these performance options is considered improbable at this time. The total amount of unrecognized compensation cost related to non-vested stock options and stock purchases, net of forfeitures, was $1.7 million as of September 30, 2016 and does not include performance options, the vesting of which is considered improbable at this time. This amount will be recognized over a weighted average period of 1.14 years.

A summary of the Company’s unvested restricted stock award activities as of September 30, 2016 is presented below representing the maximum number of shares that could be earned or vested under the 2005 Plan and the 2015 Plan:


	Number of Shares			Weighted Average Grant Date Fair Value
Balance at December 31, 2015		300		$	57.60
Restricted shares granted		166,000		$	3.87
Restricted share awards vested		(9,375	)	$	4.04

Balance at September 30, 2016		156,925		$	3.97

For restricted stock awards the Company recognizes compensation expense over the vesting period for the fair value of the stock award on the measurement date. The Company retained purchase rights with respect to 157,000 shares of unvested restricted stock awards issued pursuant to stock purchase agreements at no cost per share as of September 30, 2016. As of September 30, 2016, there was approximately $456,000 of total unrecognized compensation costs, net of forfeitures, related to non-vested stock award which are expected to be recognized over a weighted average period of 2.22 years.