Stockholders Equity

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Stockholders' Equity

Note 13. Stockholders’ Equity

Common Stock

The Company amended its certificate of incorporation on May 11, 2015, to decrease the number of authorized shares of common stock from 600,000,000 to 200,000,000 shares. The 200,000,000 authorized shares of common stock have a par value of $0.001 per share. As of September 30, 2016, 7,060,269 and 7,058,873 shares were issued and outstanding, respectively. As of December 31, 2015, 6,845,638 and 6,844,242 shares were issued and outstanding, respectively.  

Preferred Stock

Pursuant to the Company’s amended and restated certificate of incorporation, the Company is authorized to issue 10,000,000 shares of preferred stock, each having a par value of $0.001. The preferred stock may be issued from time to time in one or more series with the authorization of the Company’s board of directors, with such voting, conversion and other rights and preferences as the board of directors may determine. No shares of preferred stock have been issued to date.    

Stock-based Compensation

2014 Equity Incentive Plan

As of September 30, 2016, there were 68,450 shares available for issuance under the Company’s 2014 equity incentive plan and options to purchase 1,200,644 shares of common stock were outstanding, including 571,800 options that were fully vested. As of September 30, 2016, there was total unrecognized compensation expense of $1,064,203 related to unvested stock options, which the Company expects to recognize over a weighted-average period of approximately 2.41 years.

In April 2016, in connection with the severance of an employee, the Company accelerated the vesting of 8,957 unvested stock options, as well as the period following termination whereby all of the employee’s vested stock options, including those accelerated as part of the severance agreement, could be exercised for a two year period from the termination date. As a result of this modification, the Company recorded incremental stock-based compensation expense of approximately $0 and $13,500 for the three and nine months ended September 30, 2016.  

A summary of the Plans’ stock option activity is as follows:

	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at December 31, 2015		736,645		$	4.18	7.5		$	947,794
Granted		548,400		2.47
Exercised		(4,712	)	2.15
Forfeited		(79,689	)		4.90
Balance at September 30, 2016		1,200,644		$	3.36		7.9	$	48,246
Vested and expected to vest at September 30, 2016		1,111,699		$	3.37	7.8		$	48,086
Exercisable at September 30, 2016		571,800		$	3.44	6.5		$	40,266

As of September 30, 2016, there were 350,499 restricted stock units (“RSUs”) unvested and outstanding. Unrecognized compensation expense related to the remaining RSUs was $730,655 at September 30, 2016, which the Company expects to recognize over a weighted-average remaining service period of one year.

A summary of the Plans’ RSU activity is as follows:

	Restricted Stock Units (RSU)			Weighted- Average Grant Date Fair Value Per Share
Balance at December 31, 2015		27,500		$	5.45
Granted		379,761		2.44
Vested		(36,762	)		2.90
Forfeited		(20,000	)		2.46
Balance at September 30, 2016		350,499		$	2.43
Vested and expected to vest at September 30, 2016		333,117		$	2.43

The stock-based compensation expense recorded in the condensed statements of operations for the three and nine months ended September 30, 2016 was $229,918 and $552,054, respectively, and $77,239 and $223,787 for the three and nine months ended September 30, 2015, respectively.

2014 Employee Stock Purchase Plan

In April 2015, the Company’s stockholders approved the 2014 Employee Stock Purchase Plan (“ESPP”), which became effective in May 2015. Initially, the ESPP authorized the issuance of up to 110,820 shares of common stock pursuant to the purchase rights granted to the Company’s employees or to employees of the Company’s designated affiliates. The number of shares of common stock reserved for issuance automatically increased in accordance with the plan by 68,442 on January 1, 2016. The ESPP enables participants to contribute up to 15% of such participant’s eligible compensation during a defined period (not to exceed 27 months) to purchase common stock of the Company. The purchase price of common stock under the ESPP will be the lesser of: (i) 85% of the fair market value of the Company’s common stock on the first date of an offering or (2) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. As of September 30, 2016, 39,978 shares of stock have been purchased under the ESPP since its initiation in January 2016 at a weighted average price per share of $2.54.