3.	Stock-Based Compensation

Following is the stock-based compensation expense related to common stock options, common stock, restricted common stock and common stock warrants:


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in thousands)

Research and development	$	226	$	221	$	543	$	860

General and administrative		574		524		1,191		1,534


Total stock-based compensation expense	$	800	$	745	$	1,734	$	2,394

The following table summarizes the stock option activity in the Company’s equity incentive plans from December 31, 2014 through June 30, 2015:


	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2014		3,332,617		$	5.79
Granted		304,000			3.45
Exercised		(95,574	)		1.80
Options forfeited/cancelled		(348,718	)		4.42


Outstanding, June 30, 2015		3,192,325		$	5.83

As of June 30, 2015, there was $3,492,000 of unrecognized compensation related to 828,596 unvested options, which is expected to be recognized over a weighted–average period of approximately 1.67 years. The weighted-average grant date fair value for options granted during the six months ended June 30, 2015 and 2014 was $2.78 and $11.38, respectively. The Company granted 304,000 stock options in January 2015, of which 76,000 options vested upon grant with the remaining 228,000 options vesting over 3 years. Approximately $173,000 of non-cash, stock-based compensation expense was recorded during the six months ended June 30, 2015 related to the options granted in January 2015 that were vested upon the grant date.

The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:


	Six Months Ended June 30,	Six Months Ended June 30,
	2015	2014
Risk-free interest rate	1.64%	1.58%
Expected life of the options	6.0 years	6.0 years
Expected volatility of the underlying stock	104%	114%
Expected dividend rate	0%	0%

The following table summarizes the restricted stock grant activity in the Company’s equity incentive plans from December 31, 2014 through June 30, 2015:


	Shares
Outstanding, December 31, 2014		416,670
Granted		337,935
Exercised		—
Options forfeited/cancelled		—


Outstanding, March 31, 2015		754,605

On March 12, 2015, the Company granted 81,352 shares of restricted stock to non-employee directors as a component of their compensation. A total of 77,784 shares were issued to seven directors representing non-cash compensation cost of $280,000 which will be recognized on a straight-line basis from the grant date through May 20, 2016, when the restricted shares will vest in full. A total of 3,568 shares were issued to two directors, who were not nominated for reelection, representing non-cash compensation cost of $12,845 that will be recognized on a straight-line basis from the grant date through May 21, 2015, when the restricted shares will vest in full.

On April 8, 2015, the Company granted 177,618 shares of restricted stock to non-employee directors in exchange for cancelation of 222,615 stock options. As the exchange was made at fair value, there was no additional non-cash compensation expense recorded in accordance with FASB ASC 718-20. Additionally, on April 8, 2015, the Company granted 71,378 shares of restricted stock to one non-employee director representing $236,975 of non-cash compensation expense which will be recorded on a straight-line basis from grant date to May 20, 2016, when the restricted shares will vest in full. Also, in April and May 2015, the Company granted a total of 7,587 shares of restricted stock to four non-employee directors for service as committee chairs or lead independent director representing $23,500 of non-cash compensation expense which will be recorded on a straight-line basis from grant date to May 20, 2016, when the restricted shares will vest in full.

In January 2014, the Company entered into an agreement with a consultant that provided for the grant of 3,000 shares of common stock. The Company recognized an expense of $25,000, representing the fair value of the common stock, during the three months ended March 31, 2014.