10.

Stock-Based Compensation

In the accompanying condensed consolidated statement of operations, the Company recognized stock-based compensation expense for its employees and non-employees as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in thousands)
Research and development	$	225	$	9	$	299	$	18
General and administrative		195		50		301		63

Total stock-based compensation	$	420	$	59	$	600	$	81

Determination of Fair Value

The estimated grant-date fair value of all the Company’s stock-based awards was calculated using the Black-Scholes option pricing model, based on assumptions as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2015	2014			2015	2014
Expected term (in years)	5.2 – 10.0		5.7		6.0 – 10.0	5.0 – 5.7
Expected volatility	75 – 79%		83	%	75 – 81%	81 – 83%
Risk-free interest rate	1.7%		1.6	%	1.5 – 1.7%	1.5 – 1.7%
Expected dividend rate	— %		—	%	— %	— %

Equity Incentive Plans

2008 Plan

On June 24, 2008, the Company’s board of directors approved the 2008 Stock Plan (the “2008 Plan”) for issuance of up to 308,725 shares of common stock to be administered by the board of directors or a committee appointed by them. Amendments to the plan were approved by the board of directors to increase the authorized shares to 1,580,537 at December 31, 2013 and 4,802,013 shares as of December 31, 2014. The 2008 Plan allows for the granting of Incentive Stock Options (ISO), nonqualified stock options and stock purchase rights. The term of the plan is for the later of 10 years from the effective date of the 2008 Plan or the earlier of the most recent board or stockholder approval of an increase in the number of shares reserved for issuance under the 2008 Plan.

2005 Stock Plan

As of June 30, 2015, there were 940 awards issued and outstanding under the Company’s 2005 Plan (the “2005 Plan”). The terms of the 2005 Plan are similar to those of the 2008 Plan. On August 20, 2008, the board of directors canceled all shares available under the 2005 Plan with the intention to not issue any more shares under the plan.

A summary of activity under the 2005 Plan and 2008 Plan and related information is as follows:


				Options Outstanding
	Shares Available for Grant			Number of Shares Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value of Outstanding Options (in thousands)

Outstanding — December 31, 2014		1,550,101			2,138,096		$	0.91		9.29	$	3,153
Awards authorized		—			—
Options granted		(1,184,566	)		1,184,566			5.62
Options exercised		—			(27,813	)		1.00
Options cancelled		—			—			—

Outstanding — June 30, 2015		365,535			3,294,849		$	2.60		9.19	$	40,849


Exercisable — June 30, 2015					2,115,209		$	0.92		8.81	$	29,783


Vested and expected to vest — June 30, 2015					2,983,562		$	2.71		9.20	$	36,665

The weighted-average grant date fair values of options granted during the three and six months ended June 30, 2015 was $12.03 and $4.35 per share and during the three and six months ended June 30, 2014 was $0.41 per share. The aggregate intrinsic value of options exercised was $0 and $0.4 million for the three and six months ended June 30, 2015 and $16,000 and $0.1 million for the three and six months ended June 30, 2014. The total grant date fair value of options vested for the three and six months ended June 30, 2015 was $0.1 million and $0.2 million and during the three and six months ended June 30, 2014 was $0.1 million.

As of June 30, 2015, total unrecognized stock-based compensation related to unvested stock options was $12.8 million, net of estimated forfeitures, which the Company expects to recognize over a remaining weighted-average period of 1.92 years. Certain stock options are subject to occurrence of a performance condition.

Performance-Based Stock Option Grant

During the year ended December 31, 2014, the Company granted options to purchase 217,305 shares of common stock to an executive officer which contains both performance-based and service-based vesting criteria. Stock-based compensation associated with these performance-based stock options is recognized if the performance condition is achieved.

On January 24, 2015, the Company amended the terms of the performance-based stock options to extend the date of the performance-based milestone. As of June 30, 2015, management had concluded that the performance-based milestone was not probable of achievement. As such, no stock-based compensation was recorded during the three and six months ended June 30, 2015 related to these options. If the performance condition had been achieved as of June 30, 2015, the Company would have recorded $0.1 million in additional stock-based compensation related to these stock options.

Liability for Early Exercise of Stock Options

The 2008 Plan allows for the granting of options that may be exercised before the options have vested. In December 2014, an executive officer early exercised 103,252 stock options. In February 2015, an executive officer early exercised 13,422 stock options. On early exercise, the awards became subject to a restricted stock agreement. The shares of restricted stock granted upon early exercise of the options are subject to the same vesting provisions as the original stock option awards. Shares issued as a result of early exercise that have not vested are subject to repurchase by the Company upon termination of the purchaser’s employment or services, at the price paid by the purchaser, and are not deemed to be issued for accounting purposes until those related shares vest. Accordingly, the Company has recorded the exercise proceeds of $0.1 million from the early exercise as a long-term liability in the accompanying condensed consolidated balance sheet as of June 30, 2015 and December 31, 2014. The long-term liability will be reclassified into common stock and additional paid-in capital as the shares vest and the repurchase right has lapses. As of June 30, 2015 and December 31, 2014, 116,674 and 103,252 shares held by the employee remain unvested and subject to repurchase with an aggregate price of $0.1 million.