12. STOCK OPTIONS

In 2007, the Company adopted the 2007 Employee, Director and Consultant Stock Plan (the "2007 Plan"). Pursuant to the 2007 Plan, the Company's Board of Directors (or committees and/or executive officers delegated by the Board of Directors) may grant incentive and nonqualified stock options to the Company's employees, officers, directors, consultants and advisors. As of December 31, 2015, there were options to purchase an aggregate of 240,863 shares of common stock outstanding under the 2007 Plan and no shares available for future grants under the 2007 Plan.

On October 26, 2010, the Company's Board of Directors adopted, and the Company's shareholders subsequently approved, the 2010 Equity Incentive Plan (as subsequently amended, the "2010 Plan"). The 2010 Plan provides for grants of incentive stock options to employees, and nonqualified stock options and restricted Common Stock to employees, consultants and non-employee directors of the Company.

In April 2015, the Company's Board of Directors adopted, and the Company' shareholders subsequently approved, the 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan provides for grants of incentive stock options to employees, and nonqualified stock, restricted Common Stock, restricted stock units and stock appreciation rights to employees, consultants and directors of the Company. As of December 31, 2015, the total number of shares authorized for issuance under the 2015 Plan is 4,322,355 shares, consisting of 4,000,000 shares plus 322,355 shares that remained available for grant under the 2010 Plan. Upon approval of the 2015 Plan by the Company's shareholders on June 16, 2016, the 2010 Plan was terminated and no additional shares or share awards have been subsequently granted under the 2010 Plan.

As of December 31, 2015, there were outstanding options to purchase an aggregate of 946,760 and 2,065,687 shares of common stock under the 2015 Plan and 2010 Plan, respectively. Options issued under the Plans are exercisable for up to 10 years from the date of issuance.

Options issued under the 2007, 2010, and 2015 Plan (collectively, the "Plans") are exercisable for up to 10 years from the date of issuance.

In March 2015, the Company's Board of Directors adopted, and the Company's shareholders subsequently approved, the Employee Stock Purchase Plan (the "ESPP"). The ESPP allows employees to buy company stock twice a year through after-tax payroll deductions at a discount from market. The board of directors initially authorized 187,500 shares for issuance under the ESPP. Commencing on the first day of fiscal 2016 and on the first day of each fiscal year thereafter during the term of the ESPP, the number of shares of common stock reserved for issuance shall be increased by the lesser of (i) 1% of our outstanding shares of Common Stock on such date, (ii) 50,000 shares or (iii) a lesser amount determined by the Board. In no event shall the aggregate number of shares reserved for issuance during the term of the ESPP exceed 1,250,000 shares.

The 2015 ESPP is considered a compensatory plan with the related compensation cost recognized over the six month offering period. As of December 31, 2015, approximately $49 of employee payroll deductions which have been withheld since July 1, 2015, the commencement of the offering period and are included in accrued expenses in the accompanying balance sheet. The compensation expense related to the 2015 ESPP for the year ended December 31, 2015 was $41. In January 2016, 6,948 shares that were purchased as of December 31, 2015 were issued under the 2015 ESPP.

Share-based compensation

For stock options issued and outstanding for the years ended December 31, 2015, 2014 and 2013, the Company recorded non-cash, stock-based compensation expense of $4,666, $2,730 and $3,136, respectively, net of forfeitures.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table. Due to its limited operating history and limited number of sales of its Common Stock, the Company estimated its volatility in consideration of a number of factors including the volatility of comparable public companies. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the financial statements, to estimate option exercises and employee terminations within the valuation model. The expected term of options granted under the Plans, all of which qualify as "plain vanilla," is based on the average of the contractual term (10 years) and the vesting period (generally, 48 months). For non-employee options, the expected term is the contractual term. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option.

The assumptions used principally in determining the fair value of options granted were as follows:

	December 31,
	2015	2014	2013
Risk-free interest rate	1.53 - 1.89%	1.62 - 2.06%	0.77 - 2.52%
Expected dividend yield	0%	0%	0%
Expected term (employee grants)	6.00 years	6.03 years	6.25 years
Expected volatility	116%	124%	102%

A summary of option activity as of December 31, 2015 and changes for the year then ended are presented below:

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2014		2,606,737		$	6.58
Granted		1,093,009		$	8.67
Forfeited		(92,997	)	$	8.66
Exercised		(353,439	)	$	4.28

Outstanding at December 31, 2015		3,253,310		$	7.47		8.08	$	3,416


Vested at December 31, 2015		1,349,752		$	6.81		6.65	$	2,459


Vested and expected to vest at December 31, 2015		2,625,248		$	7.37		7.82	$	3,073

The weighted average grant-date fair value of options granted during years ended December 31, 2015, 2014 and 2013 was $7.37, $6.15, and $7.76 per share, respectively. The total fair value of options that vested in years ended December 31, 2015, 2014, and 2013 was $5,144, $2,329 and $1,985, respectively. As of December 31, 2015, there was $8,193 of total unrecognized compensation expense, related to non-vested share-based option compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a period of 2.88 years at December 31, 2015.

	December 31,
	2015	2014	2013
Risk-free interest rate	1.53 - 1.89%	1.62 - 2.06%	0.77 - 2.52%
Expected dividend yield	0%	0%	0%
Expected term (employee grants)	6.00 years	6.03 years	6.25 years
Expected volatility	116%	124%	102%

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2014		2,606,737		$	6.58
Granted		1,093,009		$	8.67
Forfeited		(92,997	)	$	8.66
Exercised		(353,439	)	$	4.28

Outstanding at December 31, 2015		3,253,310		$	7.47		8.08	$	3,416


Vested at December 31, 2015		1,349,752		$	6.81		6.65	$	2,459


Vested and expected to vest at December 31, 2015		2,625,248		$	7.37		7.82	$	3,073