Stockholders' Equity

3 Months Ended

Mar. 31, 2017

Stockholders' Equity

Stockholders' Equity

8. Stockholders’ Equity

In 2005, we adopted the 2005 Stock Option and Incentive Plan (2005 Plan) that authorizes us to grant options, restricted stock and other equity-based awards. As of March 31, 2017,  430,922 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2005 Plan.  No additional shares are available for issuance under the 2005 Plan. 

Effective August 2014, we adopted our 2014 Equity Incentive Plan (2014 Plan) that authorizes us to grant options, restricted stock, and other equity-based awards, subject to adjustment in accordance with the 2014 Plan.  The amount, terms of grants, and exercisability provisions are determined and set by our board of directors.  As of March 31, 2017,  2,217,914 options to purchase shares of common stock and 420,400 shares of restricted stock were outstanding pursuant to grants in connection with the 2014 Plan, and 185,835 shares of common stock were available for future issuance. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors. 

Stock Options

There were 2,648,836 stock options outstanding as of March 31, 2017 at a weighted-average exercise price of $5.34 per share.  During the three months ended March 31, 2017, 558,800 options were granted to employees, directors and consultants at a weighted-average exercise price of $1.21 per share, and 149,008 options were forfeited at a weighted-average exercise price of $8.26 per share.

Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands):

	March 31,
	2017		2016
Research and development	$	195	$	233
General and administrative		466		506
Total	$	661	$	739

Restricted Stock

All issued and outstanding restricted shares of common stock are time-based, and become vested between one and three years after the grant date.  Compensation expense is recorded ratably over the requisite service period. Compensation expense related to restricted stock is measured based on the fair value using the closing market price of our common stock on the date of the grant.

During the three months ended March 31, 2017, we issued 245,200 restricted shares of common stock to employees, directors and consultants.  As of March 31, 2017 there 420,400 restricted shares of common stock outstanding. No shares vested during three months ended March 31, 2017.

Total compensation cost recognized for all nonvested stock awards in the statements of operations is as follows (in thousands):

	Three Months Ended
	March 31,
	2017		2016
Research and development	$	18	$	—
General and administrative		68		—
Total	$	86	$	—

Equity Distribution Agreement

In August 2015, we entered into an Equity Distribution Agreement (EDA) with JMP Securities LLC (JMP), under which JMP, as our exclusive agent, at our discretion and at such times that we may determine from time to time, may sell over a three-year period up to a maximum of $35,000,000 of shares of our common stock. We are not required to sell any shares at any time during the term of the EDA.

The EDA will terminate upon the earliest of: (1) the sale of all shares subject to the EDA, (2) August 15, 2018 or (3) the termination of the EDA in accordance with its terms.  Either party may terminate the EDA at any time upon written notification to the other party in accordance with the EDA, and upon such notification, the offering will terminate.

We agreed to pay JMP a commission of up to 3.0% of the gross sales price of any shares sold pursuant to the EDA. With the exception of expenses related to the shares, JMP will be responsible for all of its own costs and expenses incurred in connection with the offering.

During the quarter ended March 31, 2017, we issued 1,995,112 shares of our common stock pursuant to the EDA for aggregate net proceeds to us of approximately $2.5 million.  As of March 31, 2017, approximately $32.4 million remained available under the EDA, subject to certain SEC limitations on the amounts that may be sold in any 12-month period.